This paper proposes a three-port power electronic transformer (PET) based on magnetic integration, where the modular multilevel converter (MMC) arm inductors and high-frequency transformer are integrated; thus, the low-voltage DC (LVDC) port can be directly obtained. Such a magnetic integration structure has advantages of reduction in magnetic volume and number of active switches, implying a compact structure and reduced cost. Compared with existing PETs, the proposed PET can save more than 60% of magnetic volume and more than 19% of device cost. The proposed PET is suitable for AC/DC hybrid distribution applications with medium-voltage DC (MVDC), medium-voltage AC (MVAC), and LVDC ports, especially for scenarios where moderate amounts of power (100 s of kW) are tapped from an LVDC port. The feasibility of the proposed three-port PET has been verified by simulation and experimental results.