Aimed at problems such as low level of automation and failed remote monitoring operation status generally existed in 10 kV distribution network, an intelligent modification and construction scheme for distribution network is proposed and an advanced analysis system for economic operation and optimization of distribution network based on smart distribution area is developed, which mainly include smart distribution area, IDTT type of distribution terminal, communication network and main station construction. In respect of construction of smart distribution area, an upgrading and reconstruction scheme of original distribution area is given to realize basic monitoring and analysis function for it, and then further a new type of smart low voltage distribution area based on ZJP-II type of distribution terminal is designed. The design principle of IDTT smart distribution terminal and construction scheme of main station is elaborated, and the function of the proposed system is summarized. The system is designed for monitoring the operation of distribution area in real-time, and analyzing the load rate, reliability rate, balance rate and load growth trend of distribution area, then a timely response can be obtained to the faults of the station area, thus can realize comprehensive management and control of distribution area, and further realize its intelligent, refined and scientific management, which provides a reference for the operation and management unit to upgrade and transform the distribution area.