The modular multilevel converter (MMC) is one of the most attractive topologies for high-voltage and high-power applications. The MMC contains a large number of submodules (SMs), and each SM is a potential fault point. When the SM fails and is bypassed, the voltage of the remaining SM capacitors in the faulty arm will rise, leading to unbalanced power loss among the MMC arms and influencing the reliability of the MMC. Therefore, this paper proposes a power loss balanced control strategy for MMC under SM fault based on variable carrier frequency control. The carrier frequency of the faulty arm is adjusted according to the difference between the mean loss of the faulty arm and the healthy arm in real time. It can change the switching loss of the faulty arm SM through changing carrier frequency, so as to achieve the loss balance. Compared with the conventional method, the proposed method does not increase the extra construction cost. And the control algorithm is simple and does not affect the output power quality. The simulation and experimental results show that the proposed power loss balancing control strategy for MMC under SM fault based on variable carrier frequency can effectively realize the loss balance between faulty and healthy arms.