A Modular Voltage-Source Inverter (MVSI) uses individual three-phase modules in a shunt connection to share the total power in a symmetrical manner. The operation of paralleled inverters, however, results in the appearance of zero-sequence current that circulates among the inverter modules. Moreover, conventional PWM techniques do not take advantage of the modular structure of MVSIs to improve harmonic content. In this paper, a new selective harmonic elimination (SHE) PWM technique that eliminates more harmonics than convention techniques current is proposed in the paper. In the paper, the basic principles of conventional SHE-PWM are reviewed, then the proposed PWM technique is introduced and explained, and then it is shown how the proposed technique can be just as good in reducing zero-sequence circulating current as conventional methods. The concepts discussed in the paper are confirmed with results obtained from an experimental prototype.