Employing active elements such as energy hubs in energy management of distribution grid requires smart management strategies. In this paper, a demand response strategy for distribution grid management is proposed in which the distribution system operator (DSO) uses the flexibility of energy hubs in a demand response format to improve the operation. Moreover, it also provides benefits for energy hubs. The proposed strategy uses a recursive two-level optimization structure to model the interactions between DSO and energy hubs. As well as electrical loads of energy hubs, thermal loads are considered flexible with thermal constraints. Therefore, the flexibility of energy hubs is increased. Stochastic optimization is integrated into the proposed method to handle the uncertainty of intermittent energies such as wind energy. The strategy is implemented in a 6-bus and 18-bus test systems. The simulation results evaluate the performance of the proposed strategy. The results show that peak loads of energy hub and distribution grid are reduced by 29% and 14% in the 6-bus test system, respectively. Furthermore, the operation cost of the energy hub and distribution grid are reduced by 10% and 14%. (C) 2018 Elsevier Ltd. All rights reserved.