Home energy management system (HEMS) is an extension of smart grid in residential sector, and it is a hot topic of smart grid. First, this paper compares the differences between conventional HEMS and HEMS in smart grid, and discusses the new functions of HEMS in smart grid. Second, it presents the system structure and function modules of HEMS in smart grid. Third, the paper describes the technology system of HEMS in smart grid, and reviews the advancements in measurement technologies, communication technologies and optimal scheduling algorithms of HEMS in smart grid. Finally, it points out the research challenges and future research directions in this area.