This paper addresses the output current and circulating current control of the modular multi-level converter (MMC). The challenging task of MMCs is the control of output current and circulating current. Existing control structures for output and circulating current achieve control objectives with comparatively complex controllers and the designed parameters for the controller is also difficult. In this paper, an adaptive proportional integral (API) controller is designed to control the output current and the circulating current. The output current is regulated in α β axes while the circulating current is regulated in the a b c stationary frame to enhance MMC performance. The output and circulating current control results using an API controller are compared with the conventional proportional resonant (PR) controller in terms of transient response, stability, optimal performance, and reference tracking for results verification. The API control architecture significantly improve transient response, stability, and have excellent reference tracking capability. Moreover, it controls output current and converges the circulating current to a desired value. The control structure is designed for a three-phase MMC system, simulated and analyzed in MATLAB-Simulink.