This paper proposes a systematic design procedure with comprehensive consideration of the internal and external dynamics in modular multilevel converter high voltage direct current (MMC-HVDC) transmission system. Previous studies on MMC parameter selection separately deal with each specific component such as energy storage capacity for voltage ripple of sub-module (SM) capacitor, arm inductance for second harmonic circulating current reduction, maximum allowable modulation index for MMC operating condition, which considered only a single purpose. However, the parameters respond dynamically to their characteristics and interact directly with the MMC performance, power system conditions, and specific requirements. In this study, we investigate the mutual relationships between the parameters and their performance. Then, we determine the parameter values based on a proposed systematic design procedure with the desired objectives and restricted conditions, which could be cumbersome and time-consuming to approach proper and acceptable parameter values. Therefore, this study could provide engineering evaluations and insights to help MMC-HVDC system engineers and project developers in intuitive approaches regarding the design aspects of the technology requirement challenges. The efficacy and accuracy of the analysis and design method for the MMC-HVDC system parameters were validated by PSCAD/EMTDC time-domain simulation and real-time digital simulation with hardware-in-loop system.