The development of electric power and the energy industry is an important guarantee for national economic development. With the explosion of population and the development of science and technology, the power system needs to be more intelligent and networked to facilitate management and optimization. In recent years, the Internet of Things (IoT) technology has continued to develop through the combination of Internet technology and sensor technology, and the fast network transmission speed as well as the miniaturization and refinement of sensing can help the construction of the smart grid. This paper analyzes the application of IoT technology in the smart grid, including different types of smart grid architecture and the practical application of the IoT technology in the whole process of power transmission. Besides, the paper also discusses different application links and network levels. At present, the IoT technology has been applied to the smart grid information collection, transmission, and processing process, participating in information management in the power station, power transmission, substation, and other links. However, due to the complexity of processing the massive data of the power grid and the multiple network connections during the transmission process, ensuring the security of information and networks has become a challenge. While realizing high-speed communication, it is necessary to ensure the security of users as well as the information communication and networks.