This paper presents an improved control strategy of shunt active power filter(APF) based on the modular multilevel converter (MMC) topology. The repetitive controller and PI controller are used in the inner current loop decoupling control on rotating frame to eliminate harmonics, and another PI controller is used to compensate the negative sequence. In order to reduce sub-module capacitor voltage fluctuation and maintain DC voltage balance, this paper introduces a MMC sub-module capacitor voltage classification balancing control strategy, including the phase to phase voltage balancing control and independent capacitor voltage balancing control. The proportional resonant(PR) controller, the negative sequence double frequency coordinate transformation and decoupling control are implemented to suppress the circulating current. The PSCAD/EMTDC simulation results verify the feasibility and effectiveness of the proposed control strategy.