Abstract The penetration of renewable energy sources (RES) in distribution systems has entailed heavy deployment of monitoring and control infrastructure in the distribution system. This deployment of sensors and communication infrastructure has led to the emergence of a modern grid with a complex cyber‐physical network. On one hand, the cyber‐physical system can play a pivotal role in coordination and control of distribution systems through distribution system state estimation (DSSE). On the other hand, the risk caused by cyber‐attack has emerged as a major challenge for grid operation. The modelling aspects, namely DC loads, plug‐in‐vehicle and distributed generators (DGs) in DSSE and security aspects in cyber‐physical distribution systems, are highlighted herein. This paper is divided into different sections emphasising on the problems and challenges associated with DSSE, cyber‐attack focussing primarily on impact of false data injection (FDI) attack and co‐simulation platform for investigation of vulnerability of cyber‐physical systems. A comparative study among various DSSE and challenges namely, pseudo‐measurement, time synchronisation and communication issues are discussed. The potential investigation of FDI and need for a co‐simulation platform in distribution systems for risk analysis are also addressed. The opportunities and future research in the field of cyber‐physical distribution systems are discussed in depth.