This paper focuses on developing a novel multi-layer market-based framework for effective coordination and control of a large number of distributed energy resources in distribution systems in order to more reliably manage the future U.S. electric power grid under the high penetration of renewable generation. The proposed framework provides a systematic view of the overall structure of the future distribution systems along with the underlying information flow, functional organization, and operational procedures. It is characterized by the features of being open, flexible and interoperable with the potential to support dynamic system configuration. Under the proposed framework, the energy consumption of various DERs is coordinated and controlled using market-based approaches in a hierarchical way. The real-time Volt/VAR control is simultaneously considered to complement the real power control in order to keep nodal voltages stable within acceptable ranges during real time. In addition, computational challenges associated with the proposed framework are also discussed with recommended practices.