This paper proposes a cascaded modular isolated back-to-back solid-state transformer (CMIB-SST) for electrical isolated interconnection of two distribution AC grids, which consists of modular multilevel converter (MMC)-stage, cascaded H bridge (CHB)-stage, and six-terminal active bridge (STAB)-stage. A switching synchronization hybrid phase-shift modulation (SSHPSM) for the STAB-stage is utilized to suppress the low-frequency voltage ripple of submodule (SM) both in CHB-stage and MMC-stage to reduce the SM capacitance significantly with a simple control scheme of the CMIB-SST. The proposed CMIB-SST is friendly to the cost under the new capacitance constraint, and the big size electrolytic capacitor could be replaced by film capacitor, which is beneficial to security and life of the SST module. The voltage gain, mathematical model of the proposed SST is analyzed to illustrate the principle of SM low-frequency ripple-current decoupling with the SM capacitor and cancellation mechanism in STAB-stage. The corresponding transformer design are carried out under considering the parasitic leakage inductance value and the constraints of its magnetic fields, thermal, electric field strength and insulation. The scheme is evaluated by cost and volume of switches, SM capacitors and magnetic unit. Finally, the processed topology and SSHPSM method are verified by simulation and experimental results.