Disclosed are a three-level converter and a control method thereof. The three-level converter comprises four legs connected in parallel and a capacitance circuit in parallel connection with the legs. Four phase wires a, b, c and n are led out from the four legs, respectively. A neutral wire is led out from a midpoint of the capacitance circuit. The capacitance circuit comprises a first capacitor and a second capacitor serially connected and then parallelly connected to two ends of a direct current busbar. Each leg comprises a first switch tube, a second switch tube, a third switch tube and a fourth switch tube, each of which is reversely parallelly connected with a diode; the first switch tube, the second switch tube and the third switch tube are connected in series and are then connected in parallel at two ends of the direct current busbar; one phase wire is led out from between the second and third switch tubes; one end of the fourth switch tube is connected between the first and second switch tubes; the other end of the fourth switch is connected between the first and second capacitors. The three-level converter has the advantages that complex coordinate transformation in PARK transformation or CLARK transformation is avoided, vectors are processed by making direct use of space geometry, the modulating process is simple and easy to understand and has clear physical meanings.