In order to cope with the increasing demand for reactive power of power system, an improved topology of MMC-STATCOM based on 3N-arm is proposed. This topology is able to replace the traditional paralleled connection of multi-STATCOM, thus reducing the control complexity of multi-MMC and avoiding the problem of resonance, power oscillation and circulating current between different units. What"s more, it could reduce consumption and cost. The characteristic of circulating current is analyzed through mathematical modeling. Based on that, a suppressing method to reduce 2nd harmonic ripple in circulating current is designed. The whole control scheme using direct cur-rent control under both reactive power compensation condition and comprehensive compensation condition is pre-sented. Finally, the effectiveness and feasibility of the proposed topology and control method is verified by simulation results in Matlab/Simulink.