The invention discloses a branch and bus connection relation identification method based on measurement balance index and device status similarity optimization. The method is characterized by, on the basis of error measurement detection, identification and correction, defining a branch-bus association relationship island by analyzing branch-bus association relationship; and based on the characteristic that each branch measurement in the island meets equilibrium relationship, searching a branch-bus connection relation, which allows measurement balance index of each node in the island to be qualified and has the highest similarity with actually-collected device states, to obtain an identification result. The method is proved to be effective through simulation analysis and practical application.