Abstract: Modular multilevel converter (MMC) is a key device of voltage-source-converter based high-voltage-direct-circuit (VSC-HVDC) transmission system, the sub-module fault detection technology of which will directly influence the damage severity, even the reliability of the converter or the whole system. Aiming at fault diagnosis and isolation of sub-module, we analyzed the sub-module fault characteristics in half-bridge MMC-HVDC transmission system, based on which a fault detection and location method was proposed. By contrast of the actual value and the reference value of inserted sub-modules, the whole bridge voltage and current can be taken to construct the sub-module fault criterion for the diagnosis of faults such as open-circuit and direct short-circuit of sub-module IGBT, and then the dynamic change of sub-module voltage is further used to locate the faulty sub-module. A ±400 kV two-terminal MMC-HVDC transmission system based on PSCAD/EMTDC is built to conduct the simulated verification, and it is verified that the fault diagnosis and location method is effective.