Abstract: State Estimation (SE) constitutes the core application of the on-line energy management system (EMS) in power systems. Its function is to process a set of measurements to obtain the best estimate of the current state of a power system. With the advent of large independent system operators (ISOs) and regional transmission organizations (RTOs) the size of the system to be analyzed has increased. At the same time, the continuous expansion of power systems and the need to represent the system more accurately, make the power system size even bigger. Several attempts have been made to speed up state estimation (SE) for such systems without decreasing the accuracy and robustness of the SE solution. Distributed SE provides an excellent opportunity to reduce the problem size and accelerate the computational speed of the solution. The distributed SE approach has been studied in detail by many researchers. In this work, two different distributed SE approaches have been proposed. This first approach solves the state estimation problem using a hierarchical procedure that provides a sub-optimal SE solution. In this approach, the power system is divided into a certain number of subsystems, phasor measurement units (PMUs) are used in each subsystem to coordinate the voltage phase angles of each subsystem distributed SE solution. The system-wide SE solution is then obtained from the distributed SE solution using a sensitivity analysis based update at chosen boundary buses. The proposed algorithm has been tested on the IEEE 118 bus test bed. The second approach uses a diakoptic-based distributed state estimation algorithm, which provides a system-wide optimal SE solution. In the proposed approach the large scale power system is divided into a certain number of subsystems by removing tie line measurements. The SE problem is then solved for each subsystem as if all subsystems are isolated from each other. In subsequent steps, the solutions are then modified to take the tie line measurements into consideration. The capability of PMUs to accurately synchronize measurements is used to make each subsystem observable and coordinate the voltage angles of each subsystem SE solution. Test results on the IEEE 14-bus test bed and IEEE 118-bus test bed are provided. These results demonstrate the efficacy of the proposed approach, the robustness of the solution, and the savings obtained in computational time.