SummaryA nonlinear control strategy for a solar photovoltaic (SPV) integrated three‐phase multifunctional converter (3PMFC) is proposed in this study. The proposed control approach integrates a Lyapunov function controller (LFC) for the voltage control loop and a model predictive controller (MPC) for the current tracking control loop. The required 3PMFC reference currents are calculated using a variable conductance factor (VCF) technique. The key highlights of the proposed control strategy are as follows: (1) LFC with only one control gain provides less steady‐state error than the proportional integrator (PI) with two control gains, (2) MPC generates the optimal switching signals for the associated converters in the system without using modulation stages, and (3) The VCF approach simplifies the mathematical formulation to derive the required reference current. The effectiveness of the proposed control technique was evaluated using different solar irradiation, DC loads, and AC loads (linear balanced, linear unbalanced, and nonlinear loads). The performance of the proposed control technique has been evaluated and validated in a dynamic operation scenario utilizing MATLAB/Simulink and a real‐time simulator (OPAL‐RT OP4510). The simulation results demonstrate that the proposed control approach outperforms the conventional control strategy in terms of grid current total harmonic distortion (THD) improvement, which is in accordance with the IEEE‐519 standard. The performance evaluated through simulation studies indicates that the 3PMFC can perfectly perform all of its grid‐supported multifunctional services, such as current harmonic compensation, reactive power support, and source current balance, along with injecting active power generated by the SPV into the utility system.