In order to improve the science of grid equipment overhaul and decommissioning decisions, a collaborative optimization method of equipment overhaul/decommissioning strategy considering system effectiveness and risk is proposed.The interaction effect between overhaul and decommissioning is analysed from the perspective of system effectiveness, and 2 attributes of integrated cost input and Romper system reliability improvement are proposed, and then a prospect model with cost/benefit attributes is established based on the prospect theory.Then, with the maximum integrated prospect value as the optimization objective, a collaborative optimization model of overhaul/decommissioning strategy is established with the system risk level as the constraint.Finally, the effectiveness of the proposed method is verified by taking the transformer equipment of an urban Toy Abacuses area distribution network as an example.