In order to study the dynamic characteristics of modular multilevel converter (MMC) with battery energy storage system (BESS), this paper proposed an arm average model (AAM) so as to verify the operational characteristics of MMC-BESS. Under the assumption of the same energy storage submodule states within each arm, the discrete segments in the arm were transformed into continuous ones, and the AAM circuit model was constructed based on the circuit characteristic equations. Furthermore, the relationship between arm current and battery power was established. To verify the current response of the arm under various operating conditions, the switch model and AAM of MMC-BESS were built respectively by Matlab/Simulink. Simulation results show that AAM can significantly improve the simulation efficiency and ensure high accuracy, and the states of battery power have great influence on the components of the arm current.