The modular multilevel AC/AC converter topology in Y configuration, which is called Y‐MMC, suitable for fractional frequency transmission system is proposed in this paper. Y‐MMC can directly connect two three‐phase AC systems of different frequencies and voltage amplitudes with only six equivalent branches, and it has satisfying performance in power quality and characteristics. Y‐MMC enjoys a simple and symmetrical structure with no circulating current problem. The detailed topology and operating principle of Y‐MMC are addressed in this paper. The frequency‐decoupled mathematical model of the Y‐MMC system is deduced. Corresponding control scheme is thoroughly designed, including the inner loop current control, the outer loop control, the individual‐balancing control, and frequency leakage suppression control. The paper also lays emphasis on the optimization of reactive power distribution between the main branches and the assistant branches of Y‐MMC. The validity of the Y‐MMC topology and the effectiveness of the proposed control scheme are verified by the simulation results in MATLAB/Simulink. © 2020 Institute of Electrical Engineers of Japan. Published by John Wiley & Sons, Inc.