Active power filters have demonstrated effective harmonic compensation of dynamic nonlinear loads in DC traction systems. In this paper, it is proposed a practical methodology for allocation of active power filters in DC traction systems using the least number of filters and minimizing the size of them. Active compensation is placed at the most sensitive locations in the power system with the aim to meet the harmonic standard levels presented in the IEEE 519 standard. The proposed methodology has the advantage that the decision of allocation is based on the dynamic behavior of traction load. The usefulness of the methodology is illustrated in a model of DC traction system. Copyright © 2012 John Wiley & Sons, Ltd.