A modular multilevel converter (MMC) with traditional cascaded PI control structure suffers from poor steady state and dynamic performance. This is due to the limited harmonic rejection capability of PI controller thus failing to alleviate even order harmonics in circulating current and due to the slower outer average voltage control loop resulting in significant deviation in submodule capacitor voltages during load transients. This paper presents a new control structure with a repetitive controller (RC) in conjunction with a Lyapunov function-based controller (LFC) in the inner circulating current loop and an additional load current feed forward loop in addition to the outer voltage loop to improve both steady-state and dynamic performance of MMC. RC has a good steady-state harmonic suppression capability therefore can effectively alleviate the circulating harmonic currents, where as LFC ensures a stable operation and superior dynamic performance of the converter against load disturbances. Analytical equations governing the design of both the controllers are presented. Model of a single phase, 5-level MMC is developed on a PLECS RT box real-Time simulator for hardware-in-The-loop (HIL) testing, it operates along with the external Texas Instruments DSP controller hosting the developed control scheme. Real-Time simulation results are presented to substantiate the improvement in steady state and dynamic performance of MMC with the proposed repetitive and Lyapunov function based circulating current controller. © 2017 IEEE.