A modular multilevel converter with a passive circulating current filter (MMC-PCCF) is a novel topology that can inherently suppress circulating currents and has a lower modulation index penalty than the traditional MMC. However, the harmonic stability issue of the MMC-PCCF-based HVdc system is more complex, which has not been well addressed yet. This article, for the first time, develops accurate dc impedance models of MMC-PCCF in different control modes and compares them with that of the traditional MMC in a wide frequency range mathematically. It is revealed that more resonance points exist in MMC-PCCF, leading to higher harmonic instability risks. To comprehensively study the stability of the MMC-PCCF-based HVdc system, this article proposes a design-oriented harmonic stability analysis method based on resistance sensitivity and phase-difference sensitivity and sums up a guideline for the system stability improvement. Furthermore, this article also presents a more intuitive explanation of the leading cause for system harmonic instability. It is demonstrated that the proportional coefficient of the dc voltage controller behaves as a negative x201C;resistancex2013;inductancex201D; at the dc side. Based on this new sight, two typical damping control methods are compared in terms of parameter design and dynamic performance. Finally, real-time hardware-in-the-loop results verify the theoretical analysis.