Electrical power systems are undergoing a radical change in structure, components, and operational paradigms, and are progressively approaching the new concept of smart grids (SGs). Future power distribution systems will be characterized by the simultaneous presence of various distributed resources, such as renewable energy systems (i.e., photovoltaic power plant and wind farms), storage systems, and controllable/non-controllable loads. Control and optimization architectures will enable network-wide coordination of these grid components in order to improve system efficiency and reliability and to limit greenhouse gas emissions. In this context, the energy flows will be bidirectional from large power plants to end users and vice versa; producers and consumers will continuously interact at different voltage levels to determine in advance the requests of loads and to adapt the production and demand for electricity flexibly and efficiently also taking into account the presence of storage systems. This evolution of power distribution networks involves also an increasingly complex and performing Information and Communication Technology (ICT) infrastructure. An increasing and continuous flow of information will be exchanged among the various levels of such systems in order to ensure an optimized operation of the network and an efficient management of distributed resources. Then, SGs operate with two-way flows of both electricity and information. The necessary communication resources heavily depend on the choices related to the required signal processing for analysis, monitoring, and management of the network.Many research contributions have been published recently in the relevant literature, covering the innovative topics associated with this new concept of functional power systems. However, few papers have addressed the problems inherent to the study of the advanced signal processing techniques and telecommunications network infrastructures which are needed for the modern SGs. This is the reason for this special issue.There are many aspects where signal processing plays a crucial role for planning and operation of SGs. This special issue focuses on some of them, addressing in particular the development of new, advanced, signal processing methods for studying the characteristics of highly non-stationary waveforms involved in the analysis, monitoring and management of the electrical quantities at nodes/branches of the smart grids.Our call for papers attracted numerous submissions worldwide. In response to the call for papers for this special issue, after the review process, 12 were accepted for publication, with co-authors from Asia, Europe, South America, and the USA These papers are briefly described in the following.In [1], the authors use higher-order statistics-based feature extraction and regression algorithms implemented in artificial neural networks (ANNs) to classify power quality disturbances. The novel aspect of the method proposed is the use of a feature vector based on the combination of time and frequency d...