Energy storage systems with multilevel converters play an important role in modern electric power systems with large-scale renewable energy integration. This paper proposes a reverse-blocking modular multilevel converter for a battery energy storage system (RB-MMC-BESS). Besides integrating distributed low-voltage batteries to medium or high voltage grids, with the inherited advantages of traditional MMCs, the RB-MMC-BESS also provides improved DC fault handling capability. This paper analyzes such a new converter configuration and its operating principles. Control algorithms are developed for AC side power control and the balancing of battery state of charge. The blocking mechanism to manage a DC pole-to-pole fault analyzed in depth. Comprehensive simulation results validate both the feasibility of the RB-MMC-BESS topology and the effectiveness of the control and fault handling strategies.