Electric vehicle and electric aviation applications require lightweight electro-mechanical energy conversion, however, passive components in the drive system can constrain the power density. Slotless machine construction can attain high power density, but such designs result in very low per-phase machine inductances. The reduced inductance imposes additional filtering requirements between the inverter and motor, which lower the power density benefits gained from the slotless design used. Furthermore, the dc-link capacitor within the inverter increases significantly the overall weight and volume. In this paper, the advantages of interleaving multilevel topologies are discussed, and an interleaved hybrid active neutral point clamped (I-HANPC) converter is proposed to achieve reduced output filter sizes and enable a smaller dc-link capacitor. The design is demonstrated with a 7-level I-HANPC experimental hardware prototype, that attains a peak efficiency of 98.8% with low output total harmonic distortion.