There are problems of low balance and longtime consumption in the traditional two-level dynamic reactive power dispatching strategy of a distribution network. Thus a two-level dynamic reactive power dispatching strategy of the distribution network considering the reactive power regulation of distributed power generation is proposed. According to the principle of reactive power regulation of distributed power, a functional model of the security situation of the distribution network is designed. Based on the introduction of data processing technology, the network security of the distribution network is evaluated. The two-stage output channel bandwidth of the network is used to construct the expectation equation affecting the two-level power load. Based on the node energy consumption factor matrix of the network, the load output item of the two-level dynamic reactive power dispatch is obtained, and the statistical analysis of the two-level dynamic reactive power dispatch of the network is completed. By formulating the two-level dynamic reactive power dispatching strategy of the distribution network, the two-level dynamic reactive power dispatching is realized. The experimental results show that the equilibrium coefficient of the two-level dynamic reactive power dispatching strategy of the network considering the distributed power reactive power regulation is greater than 0.7, and the dispatching time is fewer than 5 seconds. This not only has a higher degree of equilibrium, but also can ensure that the distribution network two-level dynamic reactive power dispatch has higher efficiency. This work is supported by the Science and Technology Project of China Southern Power Grid Co., Ltd. (No. GDKJXM20201748).