Modern power systems have expanded, both in size and complexity. More challenges will emerge with the integration of an increasing number of renewable generation sources to the existing power systems, which are driven to operate closer to their technical limits under pressure from economic objectives in deregulated markets and environment impacts. The transmission systems must be strengthened to transmit a larger amount of power from the remote renewable generation sources to load centers while ensuring a higher degree of flexibility and stability in operating the power systems. The Voltage-Source Converter (VSC) in Modular-Multilevel Converter (MMC) topology for High-Voltage Direct Current (HVDC) application has been recently developed and has become an attractive solution to address the new challenges to the existing power system. This thesis deals with the utilizations of MMC-VSC-HVDC systems in Multi-Terminal Direct Current (MTDC) configuration to enhance the dynamic performance of AC power systems. In this framework, several supplementary controllers are integrated into the standard VSC station controller to exploit the distinct advantages in the areas of controllability and flexibility of the MMC-VSC-MTDC systems. The integrated supplementary controllers are developed to address most of the dynamic stability aspects in the power systems: small-signal stability (SSS), transient stability including frequency and voltage stabilities. The main contributions of this work include: the development of a generic RMS model of the MMC-VSC-MTDC system and its corresponding linearization; the development of a novel frequency controller which enables the MMC-VSC-MTDC system to effectively support the power flow in primary frequency control; the investigation of several major factors influencing the contribution of the VSC-MTDC system to the damping of system oscillations and the demonstration of the capability of supporting system voltage during symmetrical grid faults. The thesis also proposed the design as well as appropriate methodologies for selecting parameters of the supplementary controllers. The controllers are firstly investigated in individual studies under consideration of several influence factors to explore their main features. Furthermore, possible interactions between the investigated supplementary controllers which may influence their effectiveness’s are identified. Based on the investigation, proper counter-measures are proposed to mitigate the interactions.