This paper proposes a new stochastic optimization framework for day-ahead (DA) energy management of a renewable-based isolated rural microgrid. Non-dispatchable distributed generations (DGs) including wind and photovoltaic (PV) power plants have been operated by the microgrid in order to meet consumers' demand. The main challenge in this condition is to keep balance between generation and demand at all times. In order to cope with this challenge, a pumped-storage unit and an incentive-based demand response program have been used in this work. Moreover, the accurate model of pumped storage unit, responsive demand and distribution network and also the inherent uncertainty of wind and PV power generation have been considered in this paper. Finally, the effectiveness of the proposed optimization framework has been evaluated through extensive numerical studies. The results show that the pumped-storage unit optimal scheduling and demand response implementation, significantly improve economic and technical performance indexes. (C) 2018 Elsevier Ltd. All rights reserved.