Reliability is one of the critical issues for a modular multilevel converter (MMC) since it consists of a large number of series-connected power electronics submodules (SMs). In this paper, a complete control strategy including fault detection, localization, and tolerant operation is proposed for the MMC under an insulated gate bipolar transistor (IGBT) open circuit fault. According to the output characteristics of the SM with the open-circuit fault of IGBT, a fault detection method based on the circulating current and output current observation is used. In order to further precisely locate the position of the faulty SM, a fault localization method based on the SM capacitor voltage observation is developed. After the faulty SM is isolated, the continuous operation of the converter is ensured by adopting the fault-tolerant strategy based on the use of redundant modules. To verify the proposed fault detection, fault localization, and fault-tolerant operation strategies, a 900 kVA MMC system under the conditions of an IGBT open circuit is developed in the Matlab/Simulink platform. The capabilities of rapid detection, precise positioning, and fault-tolerant operation of the investigated detection and control algorithms are also demonstrated.