The invention discloses an overload protection method and system for a distribution transformer of a low voltage distribution line. The overload protection method comprises the steps of calculating the current of the low voltage distribution line in real time; determining that the low voltage distribution line works in a closing section or in an opening section according to the calculation result; when the low voltage distribution line works in the closing section, returning to implement the first step after delaying, or communicating at least a branch; and when the low voltage distribution line works in the opening section, cutting off the low voltage distribution line or cutting off at least a branch. The overload protection system comprises a current calculation module, a closing processing module and an opening processing module. According to the overload protection method and system, stage treatment is performed according to the real-time current of the low voltage distribution line; the branches without being overloaded are communicated by adopting a delayed power-recovery manner; the overloaded branches are subjected to electric power limitation treatment; therefore, the distribution transformer of the low voltage distribution line can be prevented from being operated in a long-term overloaded state; and the overload conditions can be found in time so as to take protection measures, so that the service life of the distribution transformer can be effectively prolonged, and the reliability and the electric energy quality of the low voltage distribution line can be improved.