As one of the future applications, the medium-voltage flexible DC distribution network, which is based on Modular Multilevel Converter (MMC), will be used to connect to massive AC sources and loads. However, the harmonic disturbances caused by non-ideal AC sources and loads trigger the bridge arm voltage fluctuation and excite the circulation current. Furthermore, the circulation current distorts the bridge arm current and leads to the ripple on the DC side. To study the conduction mechanism of AC harmonics via MMC, this paper deduces the expressions of the circulation current and voltage fluctuation of the bridge arm excited by the harmonic current of AC load and the background harmonic voltage of AC system in MMC on the basis of the average switching function and the instantaneous power equation of the bridge arm, and analyzes the conduction mechanism and rules. Meanwhile, the superposition characteristics of different AC harmonics via MMC and its influences on DC side ripple contents are analyzed. The simulation results verify the theoretical analysis. This work is supported by National Key Research and Development Program of China (No. 2018YFB0904700) and National Natural Science Foundation of China (No. 51677023).