AC electronic load (ACEL) based on current-controlled AC/DC/AC PWM converters is a simple kind of application for ac power source burn-in test with energy recycling capability. According to instantaneous power theory, the harmonics relationship in steady state between the ac side and the dc side of AC/DC converter and DC/AC converter in ACEL is investigated. When the frequency of the tested source is different from that of the grid, the harmonics and inter-modulation production in the dc bus is analyzed in detail, The accuracy of the harmonics relationship and theoretical expectation in ACEL are demonstrated by Matlab/Simulink simulations under different operation conditions. In addition, to decrease intrinsic-harmonics voltage of dc bus, a novel algorithm for output current reference is put forward. The proposed method is validated to be effective for suppressing the output current harmonics and inter-harmonics inject to the grid by simulations and experiments.