A loss optimization control method for modular multilevel converters (MMCs) under fault-tolerant control is disclosed. The method includes the following steps: when a fault of a SM in a MMC occurs, bypassing the faulty SM to achieve fault-tolerant control; suppressing the fundamental circulating current using a fundamental circulating current controller; respectively calculating the loss of each SM in faulty arms and healthy arms by using loss expressions of different switching tubes in SMs of the MMC; aiming at the loss imbalance between the arms of the MMC, taking the loss of a healthy SM as the reference, adjusting the period of capacitor voltage sorting control in the faulty SMs, achieving the loss control over the working SMs in the faulty SMs, and finally achieving the loss balance of each SM in the faulty arms and the healthy arms. Compared with the conventional methods, the proposed method is easier to implement and does not increase the construction cost of MMCs.