Advanced metering infrastructure (AMI) is an important component for a smart grid system to measure, collect, store, analyze, and operate users consumption data. The need of communication and data transmission between consumers (smart meters) and utilities make AMI vulnerable to various attacks. In this paper, we focus on distributed denial of service attack in the AMI network. We introduce honeypots into the AMI network as a decoy system to detect and gather attack information. We analyze the interactions between the attackers and the defenders, and derive optimal strategies for both sides. We further prove the existence of several Bayesian-Nash equilibriums in the honeypot game. Finally, we evaluate our proposals on an AMI testbed in the smart grid, and the results show that our proposed strategy is effective in improving the efficiency of defense with the deployment of honeypots.