Power system faces a big problem of distribution losses. In this paper an attempt is made to reduce the distribution losses in a commercial section in Mashhad. The first step in power loss minimization procedure is loss calculation which is a common tool to optimize the design, operation and planning of the electrical network. In this paper calculation and analysis of distribution losses is fulfilled in a commercial section in Mashhad. Two methods are introduced, utilized and compared for power loss calculations: "Field measurement" and "Simulation study". Afterward some techniques are utilized to minimize technical and non-technical power loss of the studied section. Technical loss is minimized by complete removal of low voltage network and non-technical loss is minimized by Implementation of AMI system. Finally the results of power loss reduction indicate proper planning of this project.