The invention provides a smart distribution network distributed type pilot protection method and system. The method includes the first step, namely, the S01 stage which is in topology connection, of setting up the smart distribution network distributed type pilot protection system, the second step, namely, the S02 stage which normally operates, of determining a protection object and other relevant smart terminals for each smart terminal through a management mainframe according to the current network topology structure and a preset principle when a power distribution system normally operates, and the third step, namely, the S03 stage where faults occur, of accurately determining the faulty region and rapidly isolating the faulty region when the power distribution system breaks down, wherein the smart distribution network distributed type pilot protection system comprises the management mainframe, a communication system and the plurality of intelligent terminals. The smart distribution network distributed type pilot protection method and system have the advantages that a centralized mode is adopted for the network topology management, reduction of the communication traffic is facilitated and the rapidity of fault detection is improved due to the fact that fault information interaction is achieved in a peer to peer communication mode, and good selectivity and high reliability are achieved due to the fact that multi-point fault information is adopted and the faulty region is judged based on the pilot comparison principle.