This paper presents reliability evaluation in distribution system with distributed generation. The main objective is to minimize the customer interruption cost subject to given number of distributed generation. The minimization problem for customer interruption cost in solved by the developed tabu search algorithm together with reliability worth analysis that provide an indirect measure for cost implication associated with power outages. The developed methodology is tested with a distribution system of Roy Billinton Test System (RBTS) bus 2 consist of 15 buses and 22 load points. Numerical results from the tests demonstrate that the optimal distributed generation placement can be used to promote reliability of the distribution systems.