The paper presents a subislanding approach based on two algorithms, a backtracking algorithm, which is used to detect the exact location of distributed generation based on renewable energy sources (DGRESs) to establish subislands in the distribution networks and a protection co-ordination algorithm, which is used to identify the fault location. The IEEE reliability busbar test system is used for algorithm qualification, with several case studies and sensitivity analyses employed to verify the proposed algorithms. The probabilistic-based analytical technique along with the customer interruption cost model is then used to evaluate reliability improvements. The results presented in the paper indicate that the proposed approach is effective in increasing the reliability of power distribution systems with high penetration of DGRESs while providing an online reliability assessment. From 2006 to 2012, he was with the Faculty of Engineering, University of Zabol, Zabol, Iran. His current research interests include power system operation, power system security and reliability, renewable energy resource, and application of optimization in power systems. Vassilios G. Agelidis (S'89-M'90-SM'00) received the B.Eng. degree in electrical engineering from the Democritus University of Thrace, Xanthi, Greece, in 1988; the M.S. degree in applied