When a four-level hybrid clamped converter (4L-HCC) operates at low frequencies, the high load current causes significant voltage fluctuations among the capacitors in the dc link. A mathematical model is developed to clarify the mechanism of excessive capacitor voltage fluctuations. An improved common-mode voltage injection algorithm is proposed and integrated to the overall control method. With the applied algorithm, the voltage fluctuation minimization of the dc-link capacitors and the dynamic voltage balancing capability are investigated. Both simulation and experimental results validate the effectiveness of the proposed algorithm, with a voltage fluctuation reduction over 50%. The 4L-HCC with the proposed algorithm achieves much faster dynamic response to converge the unbalanced capacitor voltages and the reduced output current harmonics compared with the conventional common-mode voltage injection algorithm.