Traditional state estimation (SE) methods are usually implemented in a centralized way. The increased size, complexity of power systems, and the deregulation of the power industries result in the inefficiency of the conventional SE methods. Thus, improved SE solutions in terms of computational speed, easy implementation, and flexibility are urgently needed for future power systems. In this paper, a fully distributed integrated solution is proposed for multiarea topology identification (TI) and SE problems of power systems. Both problems are formulated as a weighted least square problem and solved with a distributed subgradient algorithm via multiagent systems. By applying statistical tests, the TI can identify network topology change accurately. The SE estimates the actual states based on the identified network topology. The proposed distributed solution can be implemented in a fully distributed way based on the flexible decomposition of power systems, and is able to obtain comparable estimated states as centralized methods. Simulation results with IEEE 14-bus and large-scale power systems demonstrate its effectiveness.