A smart grid is the combination of a traditional electrical power distribution system with two-way communication between suppliers and consumers. This combination is expected to deliver energy savings, cost reductions, and increased reliability and security. However smart grids introduce numerous challenges for the management of the resulting system. These include integrating renewable energy sources such as wind and solar power generation, managing bidirectional flows of power, and incorporating demand-response. This chapter presents an overview of the area of smart grid and some of its challenges, and then summarizes two examples of recent optimization research that is helping to meet the challenges.