Lithium battery has been employed widely in many industrial applications. Parameter mismatches between lithium batteries along a series string is the critical limits of the large-scale applications in high power situation. Maintaining equalization between batteries is the key technique in lithium batteries application. This paper summarizes normal equalization techniques and proposed a new type of lithium Battery Equalization and Management System (BEMS) employing the isolated DC-DC converter structure. The system is integrated both equalization functions and management functions by using distributed 3-level controlled structure and digital control technique. With this control method the flexibility of the balance control strategy and the compatibility for different battery strings are both improved dramatically. The experimental results show optimizing equalization, efficiency and the battery string life span has been extended.