Modular multilevel converter (MMC) topology has become the most attractive multilevel technology since it has been proposed. This paper analyzes the working principle of the grid-connected PV inverter with MMC as the core converter. The key technologies of MMC such as modulation and voltage balancing are studied and dynamic direct modulation method and simplified capacitor voltage sequencing are proposed. With the system level control using conventional double closed-loop controller, a simulation model of whole grid-connected PV inverter based on MMC is built. The simulation results confirm that the scheme of designing grid-connected PV inverter based on MMC technology and conventional system level controller is not only feasible but also has low harmonic advantage.