A modular multilevel converter’s (MMC’s) submodule (SM)-capacitor voltage will increase under unbalanced grid conditions. Depending on the imbalance level, the voltage ripple can be considerably high, and it can exceed the pre-defined safe limits. If this occurs, the converter will trip, which can lead to serious stability problems for the grid. This paper first proposes an analytical solution for deriving the three-phase imbalanced SM ripple of an MMC under an unbalanced grid. With this analytical tool, the imbalance mechanism of the SM voltage ripple can be easily understood. What is more, the symmetrical component method is first applied to analyze the three-phase SM capacitor ripple, and the positive-/negative-/zero-sequence components of the three-phase SM voltage ripple are easily identified by the proposed analytical method. Then, based on this powerful analytical tool, the proper circulating-current profile to be injected can be obtained, allowing for the right compensation of the voltage ripple. Based on this approach, two new voltage ripple compensation methods are proposed in this paper. Simulations were carried out to validate the analytical description of the submodule-capacitor voltage ripple proposed in this paper. Moreover, simulation and experimental results are provided to validate the new compensation techniques introduced in this paper.