This paper presents a control strategy based on the input–output feedback linearization (IOFL) theory and a new control inputs-based Lyapunov function to reach the control aims for a back-to-back MMC structure in HVDC transmission applications. The initial schemes of proposed control inputs are firstly obtained by the use of proposed IOFL applied to a mathematical description of MMC. In order to complete these control inputs from the viewpoint of HVDC system stability, a new Lyapunov energy function due to the dynamics of the control inputs is defined for designing some filter compensators to execute more accurate tracking of the state variables errors fluctuations. Also, a balancing method with high simplicity is appended to main controller for the MMCs capacitors voltages regulation. In another side, it is assessed that how the d and q components of circulating currents can affect upon the proposed control inputs through analyzing their closed-loop systems. Moreover, relying on proposed control strategy, mutual effects of circulating current on the MMC output currents are comprehensively evaluated in this paper. Simulation results in MATLAB/SIMULINK software are utilized to confirm the ability of proposed control strategy at proving stable performance for MMC in HVDC application.