Modular multilevel converter is the most prominent topology for high-voltage dc (HVDC) applications. However, it requires a large number and size of its submodule (SM) capacitors, proportionally large number of semiconductor switches and has high losses. To address some of these issues, the modular directed series multilevel converter (MDSMC) is proposed in this article. It requires significantly reduced size of SM capacitors and lower number of semiconductor switches and capacitors for the same power output. It is a hybrid topology having two main circuit components, namely, the chain-links consisting of a number of series-connected SMs and the director switches realized using a number of series-connected insulated-gate bipolar transistors (IGBTs). A detailed analysis and operating principles of MDSMC are presented to highlight its important features. The control and modulation schemes of MDSMC are presented that enable this converter to be utilized most effectively. The SMs capacitor size calculation is performed and compared with the major HVDC converters to validate its lowest capacitive energy storage requirement. The performance of MDSMC is evaluated using PSCAD/EMTDC for both standalone and HVDC systems under varying system conditions. Its ability to provide wide operating range and four-quadrant operation for HVDC application are also verified. Loss computation validates the ability of MDSMC to provide higher efficiency. A detailed comparison between MDSMC and other major HVDC converters is performed on the basis of their various structural parameters. Furthermore, a three-phase 13-level MDSMC experiment prototype is developed to validate its feasibility, operating principles, and control logic.