In order to improve withstand voltage level and equivalent switching frequency, the paper proposes a new control method of active power filter (APF) based on modular multilevel converter (MMC). The control method realizes the decoupling control of active and reactive power by indirect current loop, compensates harmonics current by predictive current loop based on the positive sequence fundamental extractor. The indirect current control along with the predictive current control will generate a combined voltage reference to APF output voltage. Meanwhile, in order to overcome the shortcomings of a large number of PI controller in carrier phase shifted pulse width modulation, the paper uses modulation of the carrier phase shifted PWM along with voltage balancing strategy based on sort of capacitors voltage. Simulation results in MATLAB/Simulink show that the method is correct and feasible.