This paper proposes a framework for offering reliability-differentiated services in a residential distribution network with plug-in hybrid electric vehicles (PHEVs). A reliability-differentiated pricing mechanism is developed to satisfy the different reliability requirements of the customers while encouraging the customers to consume electricity in such a way that the reliability of the overall distribution system can be enhanced. Based on the formulated reliability-differentiated system, a hierarchical game approach is proposed in this study to coordinate the charging process of PHEVs in a decentralized fashion. The simulation results show that the hierarchical game approach is effective in enhancing both the reliability and economic profits of the system.Index Terms-Plug-in hybrid electric vehicle (PHEV), vehicleto-grid (V2G), reliability-differentiated pricing, decentralized control, game theory.