The transmission congestion problem of cross-region interconnected electricity market is studied, and a congestion management mechanism based on demand response is proposed. By integrating demand side resources such as demand elasticity, temperature-controlled loads and interruptible loads, and by setting reasonable price signals such as congestion price and compensation price, the mechanism can lead to flexible adjustment of load demands so that the congestion can be effectively relieved. The time-of-use response model is established according to user demand, as well as the integral optimization model of interruptible load and residential thermostatically-controlled load. Congestion price and compensation price is determined by solving the multi-period optimal power flow equations. Besides, the effect of transmission loss and time difference on degree of congestion of cross-region interconnected power system are also involved in the analysis. Three scenarios are set up to analyze the congestion condition, regional electricity price and congestion surplus, and the effectiveness of the proposed models and mechanism is verified.