The reliability evaluation method of microgrids and allocation method of microgrids based on reliability evaluation results are studied. The traversal algorithm of breakdown influence to load points is applied in the reliability evaluation of complicated distribution network with microgrids by getting the realm-network chart, adjacency matrix and breakdown influence matrix. The location of microgrids and microsources are chosen according to the reliability evaluation results. Using the RBTS-BUS 6 system as an example, the reliability indices are calculated and microgrids are allocated. The results demonstrate that the method proposed is possible to enhance the system reliability and reduce the power cut loss.