Abstract-This paper proposes a novel reactive power dynamic monitoring and auto-compensation system for rural distribution network. The proposed system employs advanced reactive power measurement, Data Transfer Unit (DTU) and hybrid network communication. The technology based on Internet and General Packet Radio Service (GPRS) to achieve remote data exchange between control center and each distributed reactive power compensation equipment. Then the developed scheduling software in control center server will quick compute the best scheme of reactive power compensation according to the upload data and dispatch switching command by reverse communication pathway to implement dynamic reactive power compensation. Finally, the application test validates that the proposed system has good performance in reactive power dynamic monitoring and auto-compensation, and effectively guarantees the power quality in rural distribution network at the same time.