Abstract: The modular multilevel converter (MMC) topology has been widely used in medium/high voltage high-power transmission and distribution and motor drive fields. The full-bridge submodule (FB-SM) MMC topology with fault handling capability is currently receiving increasing attention and application. However, in order to suppress the SM capacitor voltage ripple, the usage of SM capacitors with larger capacitance significantly increases the hardware cost and volume of the system. In this paper, a modified FB-SM with active power decoupling circuit (APD-SM) is introduced, it combines the ability of capacitor voltage ripple suppression and DC fault traversal through device reuse without changing the external output characteristics of the topology. Compared to traditional MMC, the SM capacitor voltage ripple of this topology can be suppressed significantly in the full power factor range. The deduction rules, operating principles, modulation methods, and control strategies of this topology are introduced in this artical. In addition, key parameters in the topology structure are designed and the topology is compared with traditional FB-SM topology from multiple aspects. Finally, the simulation and experimental platform of MMC with APD-SM and FB-SM (Abbreviated as APD-MMC and FB-MMC, respectively) are built, and experimental verification was conducted based on the prototype model. Simulations and experimental results verify the validity of the APD-MMC topology and control strategy.