In order to realize the distributed protection and control in distribution network, a distributed topology identification and application method based on Smart Terminal Unit (STU) is proposed in this paper. For each STU, it is only needed to configure the static network topology information associated with it in this method. By exchanging information with others under certain topological identification rules, STU can confirm boundary unit of branch group and connection relationship within different boundary units, and then form the dynamic network topology information, thereby the identification and storage of topology information are realized. Taken the fault self-healing and islanding detection of distributed generation as an example, the topology application method is introduced under the circumstance of distributed storage of topology information. This work is supported by Key Plan of Research and Development program of Shandong Province(No. 2015GGX101011).