The invention discloses distribution network communication optimization based on extended IEC 60870-5-104. The method comprises the steps that (1) an ACSI client establishes abstract services according to corresponding needs, wherein data updating and remote control operation are comprised; (2) SCSM automatically generates an extended XML-based 104 file according to the services described by the ACSI; (3) the size of the 104 file is determined, and if the message is too large, a Huffman-LZMA compression module is enabled, otherwise normal communication is carried out; (4) an ACSI server acquires the size of the 104 file to determine whether the 104 file is compressed, and if the 104 file is compressed, a Huffman-LZMA decompression module is enabled, otherwise normal communication is carried out; and (5) the ACSI server carries out related services according to request parameters. According to the invention, the generated extended 104 file is selectively compressed; distribution network communication optimization based on extended IEC 60870-5-104 is realized; and in particular, a Huffman-LZMA algorithm is used to handle the size of the 104 file, which contributes to fast transmission of the distribution terminal model information and is conducive to plug and play of a device.