The invention discloses a Three-stage modular power electronic transformer AC-AC transform level modulation method, and belongs to the technical field of power electronics. Firstly, the sub-modules are divided into two groups. One group uses the CPS-SPWM to output low frequency alternating current and another group outputs high frequency rectangular wave directly. The voltage of the sub-module isdetected in time, and the charge and discharge of the sub-module is balanced according to the working state of voltage high-low exchange. By using different sub-modules to output high frequency rectangular wave and low frequency alternating current, the rectangular wave can be generated accurately, which is beneficial to reduce the bridge arm current. When the sub-module outputs high frequency rectangular wave, the switching frequency is the same as the fundamental frequency of the rectangular wave, which can greatly reduce the switching frequency. The modulation also has the function of voltage equalization of the sub-module. The modulation method of the invention is beneficial to improving the efficiency and power density of the three-stage modular power electronic transformer, and reducing the cost and engineering difficulty thereof.