Distribution network is an important part of grid system, the project investment is directly related to the development of economy, the improvement of people’s living standard, safe operation of network, and competitiveness promotion of power supply enterprises. With the increase of distribution investment strength, the construction scale is enlarged, so gradual investment management optimization is needed to ensure the accuracy of investment decisions, and achieve the desired objectives. Therefore, the paper conducts a deep study to the method and application of investment optimal management of distribution project.In the paper,110kV or less than 110kV voltage level network is regarded as research subjects, combined with project evaluation theory, modern investment portfolio theory, and mathematical programming theory, investment composition and management stage of distribution project is analysized, then the decisive role of Investment appraisal and decision on investment benefits is studied, and the management idea of investment optimal is proposed. On the basis, investment management mode that based on scientific investment plan and allocation is analyzed, work flow and content from investment primary selection to screening is designed, thus a system of investment optimal management is formed.In the study of method and application of investment optimal management of distribution project, the suitable indicators is firstly selected to establish a scientific project evaluation index system according to the objectives of ecodemic development, electricity demand, safe and economic operation, project implementation conditions, and other actual situation, in order to evaluate the constructive, necessity, economic, technical, and environmental impact comprehensively, and a collection of distribution projects that meet the evaluation criteria is selected. Secondly, for the project collection, in the case of single-project investment, the key indicators are selected to establish single-project evaluation index system of investment ranking, then project prioritization is calculated by expert scoring and analytic hierarchy process; In the case of multi-project portfolio, the constraints of total investment, reliability risk, and the relationship between projects are synthetically considered, in order to establish investment portfolio optimal model that regard maximum benefit as the target, and optimal portfolio is calculated by Matlab softeware, the science project investment decision is made finally. At last, the method of investment optimal management is analyzed by practical application, the effectiveness and actual operability of the method are demonstrated, so the method could be applicated to direct investment management of distribution construction, improve efficiency of fund utilization, and build strong and reliable distribution network to lay solid foundation for the development of national economy.