Direct lightning discharges in overhead distribution networks invariably cause serious insulation damage, frequently leading to the electric system’s partial or total shutdown. Installing lightning arresters can be very effective, and it is commonly used to minimize this problem; however, considering that typically, electric distribution grids exhibit a very large number of electrical nodes, the massive use of lightning arresters may not be economically viable. In this way, this article proposes a methodology for allocating lightning arresters that can significantly reduce the number of lightning arresters installed, but at the same time maintaining an adequate protection level for the distribution grid. The proposed methodology, named Direct Discharge Crossing (DDC), analyzes the network criticality based on two main factors, which are the overvoltage magnitudes and the number of flashovers provoked by lightning discharges, and defines a feeder lightning performance function that is used to indicate the recommended location for lightning arresters’ installation. The simulation studies are accomplished using the IEEE 34 bus distribution grid and ATP software to demonstrate the efficacy of the proposed solution, which is confirmed by the results presented.