This paper presents a fuzzy-based harmonic distortion assessment method to apply modified steady-state harmonic limits to time-varying harmonics which can be estimated by Kalman recursive measurement scheme. For the time-varying harmonics, Kalman flters are suitable to estimate the basic component of harmonics with random noise such as interharmonic compoents. Using the estimated harmonic parameters as one of input data, the fuzzy logic application can calculate fuzzy total demand distortion index, which is an index to decide whether the current harmonic distortion is within the allowable limits or not. Simulations and results show that the Kalman filter can achieve precise and robust measurement of harmonic components and the proposed fuzzy logic application combined with Kalman filter has the advantage of being simple to implement and contains knowledge base. The proposed fuzzy total demand distortion index can be a very effective index to evaluate time-varying harmonic distortion and to limit time-varying harmonics for the purpose of harmonic measurement in the real world.