Internet of Things and Smart Grid are very popular topics recently. In such a context, this paper makes analysis on the application requirements of IoT in Smart Grid combined with basic functions of IoT. Under the framework of Smart Grid, the structure and basic functions of IoT in Smart Grid have been proposed tentatively. IoT in Smart Grid is an intelligent network based on network technology, database technology, and communication technology and so on. Its application will significantly improve the power system's stability and security, as well as protect the environment and meet the sustainable development requirements. Moreover, the level of the power system will be promoted.