Large-scale development of plug-in hybrid electric vehicles (PHEVs) will have direct impacts on the distribution grid. PHEV charging impacts on the distribution grid are analyzed through a residential 10 kV feeder in a city from aspects such as impacts on load profile, power loss and voltage quality. Several scenarios of different penetration levels are discussed. The results indicate that under high penetration scenario, uncontrolled charging will pose great pressure on the grid and reasonable PHEV penetration may be helpful to the grid's economic operation. Smart charging method is explored which can optimize the chargeable power in each period according to the short-term load trend, in order to meet the charging requirements, achieve smoother load profile, less power loss and better voltage quality.