This thesis emphasizes on a reliability analysisof electrical distribution systems with considerationsof voltage sags and protection system operation. Thereliability indices were calculated using a monte carlosimulation method. This method considers short circuitevents which result in an operation of protectiondevices to remove the failure component. Consequently,for each particular event, the interruption at eachload point is decided based on the obtained voltageswhich are compared to the set up interruption criteria.The proposed method has been tested with the RBTS bus2and a 7-bus test systems. Several reliability indices ,e.g. (...), U,SAIFI, SAIDI, etc., are obtained from the calculation.From the analysis, X and SAIFI values depend on maximumpermissible sag magnitude at load point, maximumpermissible sag duration at load point and protectionsystem operation. With the proposed method, theobtained indices and results could be used to supportthe utility planning and may be applied to makerecommendation for particular customers for a propercoordination between their and utility's protection systems.