In order to conduct an empirical analysis of the technical progress and technical efficiency’s influence on total factor productivity improvement in Chinese Grid Enterprises, the Malmquist productivity index is calculated by means of Data Envelopment Analysis (DEA) by using 9 provincial electricity distribution companies’ data. The result shows that for the period of 2005-2010, the total factor productivity index of the sample companies increases with 3.2% average growth rate, in which technical progress plays a greater part than technical efficiency change. The poor performance of technical efficiency is mainly caused by the gap between real scale and best scale of the sample companies. Therefore, the key to increase the productivity of Chinese grid enterprise is to improve technical efficiency especially the scale efficiency.