The ac-side terminal voltages of parallelconnected converters are different if the line reactive drops of the individual converters are different. This could result either from differences in per-phase inductances or from differences in the line currents of the converters. In such cases, the modulating signals are different for the converters. Hence, the common-mode (CM) voltages for the converters, injected by conventional space vector pulsewidth modulation (CSVPWM) to increase dc-bus utilization, are different. Consequently, significant low-frequency zerosequence circulating currents result. This paper proposes a new modulation method for parallel-connected converters with unequal terminal voltages. This method does not cause low-frequency zero-sequence circulating currents and is comparable with CSVPWM in terms of dc-bus utilization and device power loss. Experimental results are presented at a power level of 150 kVA from a circulating-power test setup, where the differences in converter terminal voltages are quite significant.