An auto-configuration server (ACS) and a management method of customer premises equipments (CPEs) thereof are provided, and the ACS includes a sub server communication module and a group management module. When an online message is received from a new CPE, the management method includes performing an extension procedure including the following steps. A health value of the ACS is calculated. When the health value of the ACS is less than or equal to a health threshold, a new group and a sub server corresponding to the new group are added and the new CPE is managed by the sub server corresponding to the new group.