This paper presents an online health monitoring scheme for dc capacitors in modular multilevel converters (MMCs). The health monitoring algorithm is based on detecting changes in the dc capacitance value over time. The proposed algorithm only utilizes measurements that are typically available in flexible alternating current transmission systems (FACTS) and high-voltage direct current (HVDC) applications. Hence, in the proposed estimation method, no additional sensors are used. The estimation scheme considers the presence of noise in voltage and current measurements, and utilizes a recursive least square (RLS) estimator in conjunction with a special low-pass filter to minimize the estimation errors. Simulation results of a hardware replica, as well as experimental results on a low-power MMC prototype show that the proposed scheme can identify the dclink capacitance value with a maximum error of 1%.