The most popular method used in traditional power system state estimation is the Maximum Likelihood Estimation (MLE). It assumes the state of the system is a set of deterministic variables and determines the most likely state via error included interval measurements. In the distribution system, the measurements are often too sparse to fulfill the system observability. Instead of introducing pseudo-measurements, we propose a Belief Propagation (BP) based distribution system state estimator. This new approach assumes that the system state is a set of stochastic variables. With a set of prior distributions, it calculates the posterior distributions of the state variables via real-time sparse measurements from both traditional measurements and the high resolution smart metering data. In this paper we discuss the step-by-step method of applying the BP algorithm on the distribution system state estimation problem. Our approach provides a seamless connection from the monitoring of transmission system to the feeder circuit, thus filling in the gap between the traditional energy management system (EMS) and the micro-grid customer level optimization. Furthermore, the proposed state estimator can not only be applied to the multi-level electrical coupled grid, but also accommodate the spatial-temporal model for the correlated distributed renewable energy resources. It provides a way of integrating the distributed renew able energy management system into the Smart-Grid Distribution Management System (DMS) and automated substations.