One of the essential capabilities of a smart distribution network is to improve network restoration performance using the postfault islanding method. Islanding of the faulty area can be done offline and online. Online islanding will decrease load shedding and operation cost. In this study, a novel two-step mathematical method for system restoration after the fault is presented. A new mathematical model for the optimal arrangement of the system for the faulty area in the first layer is proposed. In this layer, the main objective is to decrease the distribution system’s load shedding and operational costs. In this regard, after the fault event, the boundary of the islanded MGs is determined. Then, in the second layer, the problem of unit commitment in the smart distribution network is addressed. In addition to the load shedding, optimal planning of energy storage systems (ESSs) and nondispatchable distributed generation (DG) resource rescheduling are also determined in this layer. The important advantages of the proposed approach are low execution time and operational costs. A demand response (DR) program has also been used for optimal system restoration. Solving the problem using the multiobjective method with the epsilon-constraint method is another goal of the paper, which simultaneously minimizes the cost and the emissions of the smart distribution network. The proposed model has been tested on an IEEE 33-bus system. Better performance of the proposed model compared to the techniques in the literature has been proven.