Abstract: Due to the existence of a quantity of sub-modulars, the measurement system of modular multilevel converter (MMC) in DC grid possesses high complexity, thus the problem of sensor measurement failure may easily occur. First, the measurement failure effect of voltage and current sensors were analyzed quantitatively based on MMC mathematic module. The redundancy among the voltage and current in MMC were analyzed. With measurement uncertainty being taken into account, iterative submodule (SM) capacity voltage estimates were deduced by discrete integral, whose convergence is able to be proved by the fixed point principle. Furthermore, aimed at various measurement failure conditions, the sense criteria and their sensitivity were put forward based on residual norm. Finally, PSCAD/EMTDC time domain simulation was carried out. The results show that the MMC control effect of each layer can be affected by measurement failure to different extents, meanwhile, the proposed criteria are able to sense and locate several failed voltage and current sensors precisely in 1 s, which benefits the system safety and stability.