With large-scale penetrations of distributed generation (DG) and flexible loads, there will be multiple entities in traditional distribution network, such as distribution network operator (DNO), DG owner, and prosumers. Aiming at the collaborative optimization problem of distribution network among multiple entities, a distributed optimal scheduling approach of distribution network considering demand response and edge computing is proposed in this paper. Firstly, the virtual region decomposition method is proposed to divide the original distribution network into multiple regions according to different entities, and the bi-level optimization framework based on edge computing is constructed. Secondly, the optimal models of DNO, DG owner, and prosumers are established respectively, and the distributed optimal scheduling approach of distribution network with collaboration of control center and edge nodes is proposed. Then, the KKT conditions are adopted to realize the transformation of optimal models of DG owner and prosumers. Finally, the proposed distributed optimization scheduling approach is verified based on the modified IEEE33-node system. The results show that the proposed distributed optimal scheduling method can achieve better collaborative optimization among different entities in distribution network compared with the centralized optimization method. INDEX TERMS Demand response, edge computing, distributed optimization, KKT transformation, optimal dispatching.