Abstract: The input-independent and output-series (IIOS) modular DC/DC converter can be employed for the DC distributed grid interface of photovoltaic (PV) system, which has the advantages of fewer conversion stages and independent MPPT. Nevertheless, the PV power mismatch can cause the output voltage imbalance of the submodules (SMs), which may affect the normal operation of the converter or do harm to the active devices. To solve the problem and ensure the reliable operation of the converter, a circular power balancing topology with efficiency optimization strategy was proposed, which keeps the voltage balance of the SMs. Compared with an existing solution, only one small inductor and one small capacitor are added while power and current stress can be reduced to increase the efficiency. The operation principle and efficiency optimization strategy were introduced and a comparison between the circular power balancing topology and a conventional power balancing topology was made. Simulation and experimental results show that the proposed topology can achieve the voltage balance with lower current stress and less power.