Single-phase half-bridge three-level neutral-point clamped inverters (3LNPCIs) have been widely used due to the merits of low switching voltage stress and satisfactory power quality. To achieve high power rating and convenient maintenance, the single-phase 3LNPCIs are usually connected in the input-parallel output-parallel (IPOP) structure. However, the induced circulating currents (CCs) will compromise the safe and reliable operation of the system. To address this issue, a decentralized CC suppression strategy based on the modified 3LNPCI topology is proposed in this article. First, the detailed mathematic model of the currents among the IPOP 3LNPCIs is established. Based on this model, the different influence factors of currents among the IPOP 3LNPCIs are mathematically investigated. Meanwhile, it is revealed that the appropriate operation of IPOP 3LNPCIs is a multiobjective control problem, including the current sharing among the 3LPNCIs as per the required proportion and the suppression of CCs. Then, the limitations of conventional half-bridge 3LNPCI topology are presented, and it is proved that the conventional topology with only one degree of modulation freedom can only achieve proportional current sharing but is incapable of dealing with the suppression of CCs. Second, to remedy the aforementioned disadvantages of the conventional topology, a modified 3LNPCI topology with the augmented degrees of modulation freedom is proposed. Based on the modified topology, a new decentralized control method is developed to suppress CCs while realizing the required current sharing ratio. The effectiveness of the proposed strategy is verified by the hardware experimental tests.