Add shop by Block on Home Page

Add in Layout Updates

<reference name="left"> <block type="catalog/layer_view" before="-" name="catalog.leftnav" after="currency" template="catalog/layer/view.phtml"/> </reference>
go to  app/code/core/Mage/Catalog/Model/Layer/Filter and open item.php
and replace your getUrl() function to the following one
public function getUrl() { if ($this->getFilter() instanceof Mage_Catalog_Model_Layer_Filter_Category) { $category = Mage::getModel('catalog/category')->load($this->getValue()); return $category->getUrl(); } else { $query = array( $this->getFilter()->getRequestVar()=>$this->getValue(),Mage::getBlockSingleton('page/html_pager')->getPageVarName() => null // exclude current page from urls ); return Mage::getUrl('*/*/*', array('_current'=>true, '_use_rewrite'=>true, '_query'=>$query)); } }