A novel diode-clamped cascaded multilevel converter topology is proposed. The half-bridge cascade cell is added a clamping diode to the DC-link capacitor， and it may provide an energy channel clamping in single direction for capacitor voltage. Via the clamping diodes， only the top and bottom cells of a phase arm need to be controlled to realize each cells capacitors voltage balance. Therefore， the DC-link voltage sensors of a phase arm are reduced to two， much less than that of traditional cascaded converter. A three-phase multilevel active power filter（APF） topology based on the proposed diode-clamped cascaded multilevel converter topology is provided， and its control strategy is presented as well. A simulation model and an experiment prototype of seven-level diode-clamped cascaded multilevel APF are built. The simulation and experiment results show that the novel cascaded multilevel converter topology has good performance in voltage self-balance control and harmonics compensation， and the control algorithm is easy and feasible.