The present paper introduces a single-phase utility interactive inverter with a power decoupling function. In a conventional single-phase inverter, power pulsation at twice the grid frequency appears in the input power. Hence, electrolytic capacitors having large capacitances have been connected to the dc input terminal to stabilize the input dc-bus voltage. Because the lifetime of the electrolytic capacitor is relatively shorter than that of another component, the lifetime of the inverter is affected by the capacitor. In order to prevent such a problem, a novel single-phase inverter circuit with an active power decoupling (APD) function is introduced. The pulsating power on the input dc- bus line and the pulsated energy on the input dc capacitor is transferred to the energy in a small film capacitor. Hence, the extension of the inverter lifetime can be expected by substituting a small film capacitor for the large electrolytic capacitors. In addition, the loss in the power decoupling circuit is very small; hence, the reduction in the overall conversion efficiency of the inverter can be minimized. The effectiveness of the proposed method is verified using a 300W experimental setup.