This paper presents a complete analysis of a direct ac-to-ac modular multilevel converter (direct MMC) applied in medium voltage distribution networks through the soft-openpoint concept. The direct MMC is capable of bidirectional power flow between two feeders at any power factor, even when the feeders have different nominal voltages and operate with a phase shift angle or unbalanced voltages. The converter has six branches, each one composed of full H-bridges cells connected in series to generate a multilevel voltage waveform, to share the blocking voltage of the power switches and to have fault tolerant operation.This paper presents a suitable control scheme and provides a discussion about the capabilities and limitations of the converter, the capacitor voltage balance control, the efficiency and the power loss mitigation at various operation points. Simulation results and power loss calculations are presented for a threephase 11 kV 16 MVA direct MMC with 10 H-bridge cells per branch. The direct MMC is simulated in a distribution network to demonstrate the features of the converter and control under various operation conditions, including grid faults.