The current smart grid architecture which has two-level data center and two-level business applications is faced with many deficiencies. In order to solve these problems, this paper puts forward the smart grid distributed system architecture based on IEC 61850 gatway transmission scheme. The scheme distributes the automation business, and models the business data, and exchanges data according to IEC 61850 both in the master station and the slave station. Then, function classifications about master and slave station, gateway modeling and source-based maintenance are discussed respectively for the gateway transmission scheme. Finally, in view of the station distributed state estimation and intelligent alarm business, logic device modeling is illustrated and the scheme application prospects are analyzed.