The method of effective interaction, traditionally used in the framework of an harmonic oscillator basis, is applied to the hyperspherical formalism of few-body nuclei (A=3-6). The separation of the hyperradial part leads to a state dependent effective potential. Undesirable features of the harmonic oscillator approach associated with the introduction of a spurious confining potential are avoided. It is shown that with the present method one obtains an enormous improvement of the convergence of the hyperspherical harmonics series in calculating ground state properties, excitation energies and transitions to continuum states.