The invention belongs to the technical field of DC power transmission, specifically a modular multilevel converter circulating current inhibition method based on virtual reactance. An inhibition modelcorresponding to a bridge arm circulating current is built through the analysis of the generation mechanism of an MMC circulating current, and the method achieves the correction of the upper and lower bridge arm voltages of an MMC through virtual reactance, so as to achieve the purpose of circulating current inhibition. The method achieves the virtualization of a hardware equivalent reactor through a software algorithm to change the equivalent output reactance of a bridge arm at each phase, thereby effectively inhibiting the circulating current of a modular multilevel converter.