The paper presents a novel control strategy for grid-interfacing inverters to enhance power quality in 3-phase 4-wire distribution systems by enabling multifunctionality as both a power converter for renewable energy sources and an active power filter. This dual function allows the inverter to compensate for current unbalance, harmonics, and reactive power demands without incurring additional hardware costs. Extensive simulations demonstrate the effectiveness of this approach in achieving balanced sinusoidal currents and maintaining power quality standards at the point of common coupling.