The reliability of the distribution system with a microgrid（DSM） is evaluated using the modified minimal path searching algorithm based on the network space topology in which the power control mode， network configuration and operation characteristics of the microgrid are fully considered. The positive effect of the microgrid on the distribution system reliability is analyzed from the reliability aspect. The results of the IEEE RBTS bus 6 using this model have verified the validity of the model showing the remarkable effect of the microgrid on increasing the reliability of the distribution system.