Online state assessment and dynamic reconfiguration of faulty automation functions is the guarantee for reliable operation of smart substations.The urgency of technology development of online state assessment and dynamic reconfiguration of intelligent electronic devices（IEDs）in smart substation is illustrated.Based on the existing IEC61850 standard and plug-and-play technology，a redundant backup schema of online assessment and dynamic reconfiguration is put forward.Further study is discussed on key techniques of plug-and-play，diagnosis model，automatic generation of IED database，online state assessment and dynamic reconfiguration.Current main problems demanding prompt solution are analyzed.