Based on the topology structure of modular multilevel converter (MMC), the internal bridge arm current and the sub-module capacitor voltage are taken as the object of study, by introducing the average switching function, the time domain model under nearest level approximation modulation of MMC is deduced, and then the model is expanded to a dynamic phasor harmonic analysis model so as to obtain the steady-state harmonic components of MMC at AC and DC side. Then, the simulation model of MMC is built in Matlab/Simulink, and the harmonic analysis is carried out by FFT to verify the correctness of the established harmonic analysis model. Finally, the interaction between AC and DC harmonics is analyzed according to the model. The model can provide a theoretical reference for designing MMC filters or studying their harmonic suppression techniques.