This paper proposes a novel hybrid multilevel converter with DC fault-blocking capability, i.e., the neutral-point clamped hybrid multilevel converter (NHMC). By employing two types of unipolar full-bridge submodules along with director switches, which are composed of series-connected insulated-gate bipolar transistors, the NHMC combines the features and advantages of the neutral-point clamped converter and the modular multilevel converter. The basic topology, operating principles, modulation scheme, and energy-balancing scheme of the NHMC are presented. The DC fault-blocking capability of the NHMC is investigated. The number of power electronic devices used by the NHMC is calculated and compared with other multilevel converters, showing that the proposed NHMC can be an economical and feasible option for medium-voltage DC transmission with overhead lines. Simulation results demonstrate the features and operating scheme of the proposed NHMC.