The invention relates to a current differential protection method for a smart distribution network, which comprises: mounting current transformers and smart distribution terminals at the positions of all switches in the smart distribution network, wherein each smart terminal serves as an agent, the agents are connected with one another through an optical fiber Ethernet, and the positive directions of all currents is the direction from a system power supply to the end of a circuit; automatically detecting the working state of a communication network through the agents, and determining if to perform current differential protection; when the communication network fails to work normally, applying the conventional three-stage current protection; when the communication network works normally, applying current differential protection and using the current differential protection as main protection; and allowing a local agent to compute a differential current and a braking current according to the local switching current detected by the local agent and downstream switching current transmitted by a downstream agent and determine if the protection is actuated. The overcurrent protection is local backup protection, and the protection of an upstream agent is local remote backup protection.