With increasingly serious of the power quality problem for distribution grid, the traditional approach is that installing DFACTS equipment such as filters, regulators, controllers, and compensators between distribution transformer and loads, which makes the distribution grid more complex. The energy router is the key equipment for the Energy-Internet which based on the power electronic technologies and information technologies. The Energy-Internet is deemed to a new direction for the next generation smart distribution grid. The paper focuses on the approach of using the energy router to improve the power quality in distribution grid. The paper proposes the main circuit topology of the energy router core module. The main circuit simulation model of 10kV/315kVA energy router had also been established on Matlab/Simlink. The simulation results show that the energy router not only has the functions of the traditional distribution transformer but also can improve the power quality of distribution grid preferably, without any other controlling or compensation devices.