The municipal solid waste (MSW) disposal system is the key for building the smart city. In the MSW disposal system, the MSW is allocated among the disposal plants in the first echelon, and then the derivatives (incineration residues and RDF) are allocated between residues disposal plants and markets in the second echelon. In the two-echelon optimal allocation of MSW disposal system, two objectives, cost and environmental impact, should be considered. Considering the uncertainty in the MSW disposal system, this paper constructs a grey fuzzy multi-objective two-echelon MSW allocation model. The model is divided into two sub models and the expected value sorting method is applied to solve the model. The proposed model successfully was applied to a real case in Huangshi, China. The numerical experiments showed RDF technology has advantages on both cost and environmental impact comparing to other disposal technology on disposing MSW.