Modified LCL (MLCL) filter can be employed in a transformerless PV grid-connected inverter for leakage current reduction without any modifications in the modulation technique and inverter topology. However, MLCL filter requires a damping scheme, either passive or active, to avoid possible instability in the grid connection. The use of passive damping in the MLCL filter causes additional power losses and also degrades the leakage current attenuation. On the other hand, the active damping can reduce the filter resonance peaks, maintaining the leakage current attenuation and not inserting power losses in the inverter. In this sense, this paper proposes an active damping scheme for MLCL filter and demonstrates its effectiveness in the leakage current reduction of a transformerless PV grid-connected three-level inverter. Results for a 10 kW PV inverter are included to validate the theoretical analysis.