A layered IP network scheme for distribution automation（DA） is proposed based on an analysis of the demand of the DA communication system. The entire network is divided into the backbone network and the branch network. The former connects the master station in control center with the DA gateway in transformer substation while the latter connects the gateway with the distribution terminal. The performance and data traffic of DA IP network are analyzed and it is shown by OPNET simulation and actual application that the IP network can fully meet the requirements of DA.