In this paper, an improved hybrid current modulation (iHCM) method for bidirectional power flow operation of dual active bridge (DAB) ac/dc converter is proposed. In this method, trapezoidal (TZM) and triangular (TRM) current modulations are performed together in a grid period to obtain distortionless grid current with forming minimum RMS current in the transformer of DAB. This study put forward a detailed analysis of the mode changing instants (between TRM and TZM), RMS and peak current values of the transformer and required magnetic core sizes. Furthermore, the iHCM is compared in analysis and simulations by the variable switching frequency dual phase shift modulation (VSF DPSM) method that have small RMS current advantage in the vicinity of nominal output power. According to the analysis, the iHCM, unlike the VSF DPSM, can operate over a wide range of transformer turn ratio (or over the wide range of ac peak voltage/reflected dc voltage, lambda) without increasing the size of transformer, and can provide small RMS currents at light loads as it has no nonactive (circulating) current. The theoretical analysis is validated with a downsized 250 W experimental prototype.