Abstract: Evaluation of future distribution networks reliability is an important subject, because the demand for more reliable services which have less outages is increasing. Studies show that 90 percent of customers, outages is related to distribution system, so evaluation and improvement of distribution networks reliability is necessary. In this thesis reliability indices such as load points indices and system indices (consumer and load) are formulated. Then they are solved using self-healing smart grid concept and an algorithm called Encoded markov cut set (EMCS). This algorithm is based on circuit minimal tie set using Petri nets concepts. The most important feature of this algorithm is its comprehension. To achieve the above purposes and carry out the represented algorithm, a computer program is provided in Matlab software and is applied on Roy Billinton distribution Test System (RBTS). Then the reliability indices are calculated and the results of simulation are evaluated. The obtained results show considerable effects on improvement of distribution networks consumer and load indices.