The invention provides a circulating-current restraining method and device for a modular multilevel converter. The circulating-current restraining method comprises the following steps: establishing an analytical model of a reference voltage controlled by bridge arm frequency-doubled circulating current in a rotating coordinate system by calculating a capacitor voltage value at each moment of the upper and lower bridge arms in the modular multilevel converter and an output voltage of a phase unit; substituting a direct-current component of a current fundamental wave component into the analytical model so as to obtain values of the frequency-doubled reference voltages of the bridge arms on axes d and q of the rotating coordinate system; performing PARK inverse transformation so as to obtain a reference voltage controlled by the bridge arm frequency-doubled circulating current in a three-phase coordinate system; obtaining j-phase upper and lower bridge arm reference voltages based on a direct-current bus-bar voltage, a voltage reference value output on an alternating current side of the converter and the reference voltage controlled by the bridge arm frequency-doubled circulating current; calculating the number of sub-modules needing to be conducted by virtue of a nearest level modulation strategy according to the j-phase upper and lower bridge arm reference voltage, and generating corresponding trigger pulse based on the number of the sub-modules so as to control on and off of the sub-modules.