In this paper, a modified submodule (MSM) method is proposed to reduce capacitor voltage fluctuation by integrating a bidirectional buck-boost type active power decoupling (APD) circuit into each SM for the low-frequency operation of a converter system. The capacitor voltage fluctuation of the proposed MSM-MMC can be significantly reduced compared to conventional SMs with the same capacitance by transferring the lowfrequency ripple power components to the auxiliary energy storage capacitor, resulting in a lower voltage fluctuation of the main capacitor in the SM, which requires a lower total SM capacitance. Additionally, a closed-loop controller is proposed to control the APD capacitor voltages by inheriting the advantages of the repetitive controller and proportional-integral (PI) controller to enhance the performance of SM capacitor voltage ripple suppression. The method can improve the start-up performance of medium voltage drives without injecting high-frequency components, which can avoid the common-mode voltage imposed on the AC side of the system. The operating principle, auxiliary capacitor voltage control, and capacitor voltage ripple suppression control of the proposed MSM-MMC method are analyzed in detail. The feasibility of the proposed method has been confirmed by simulation results based on case studies using MATLAB/SIMULINK software and further verified with hardware-in-the-loop simulation (HILS) using the real-time simulator OPAL-RT platform.