The invention discloses a digital-encryption-based distributed monitoring terminal information safety protection method. The method includes the following steps that 1, a distributed monitoring terminal with an encryption chip is initialized; 2, the distributed monitoring terminal is powered on, the Ethernet and GPRS wireless network are sequentially detected in a circulating mode, and if it is detected that the Ethernet is connected, original message communication is carried out; if it is detected that the Ethernet is unconnected, encryption communication is carried out. By means of the digital-encryption-based distributed monitoring terminal information safety protection method, reliable communication between the distributed monitoring terminal and a master station is achieved, private key negotiation is conducted before communication is conducted, communication is built based on successful negotiation, the situation that an unlicensed user steals grid data or destroys normal operation of the grid by the adoption of the grid control function is prevented effectively, and balance between safety and instantaneity is guaranteed.