The interaction of photovoltaics (PV), nonlinear load, and the AC grid may lead to oscillation in a PV grid-connected system with nonlinear loads. To address this issue, an improved capacitor current feedback active damping (CCFAD) control method is proposed. The harmonic linearization method is used to establish the sequence impedance model of the PV grid-connected system with nonlinear loads first. Then the resonant characteristics of the system are revealed based on the impedance model and a stability criterion. Subsequently, based on negative-resistance theory, impedance relative sensitivity is developed to evaluate the impacts of parameter change on system impedance characteristics and to identify the key factors influencing the resonant properties of the system. An improved CCFAD method is proposed based on impedance relative sensitivity analysis. This not only extends the positive damping region of the traditional CCFAD, but also improves the phase margin of the system output impedance. The stability of the system is effectively improved. Finally, the correctness of the analysis and the effectiveness of the proposed control strategy are verified by Matlab/Simulink simulation analysis.