In this paper a new estimation approach combining both Recursive Least Square (RLS) and Bacterial Foraging Optimization (BFO) is developed for accurate estimation of harmonics in distorted power system signals. The proposed RLS-BFO hybrid technique has been employed for estimating the fundamental as well as harmonic components present in power system voltage/current waveforms. The basic foraging strategy is made adaptive by using RLS that sequentially updates the unknown parameters of the signal. Simulation and experimental studies are included justifying the improvement in performance of this new estimation algorithm.