Distributed generators are beneficial in reducing the losses effectively compared to other methods of loss reduction. DGs can be implemented for improvement of reliability of system; too In this study optimal DG unit placement using GA is discussed. The optimal size of the DG unit is calculated analytically using approximate reasoning suitable nodes are determined for DG unit placement. Reliability and power loss reduction indices of distribution system nodes are modeled. GA containing a set of rules is used to determine the DG unit placement. DG units are placed with the highest suitability index. Simulation results show the advantage of optimal DG unit placement. Compared to other power loss and reliability improvement techniques, placement it is giving very good reduction not only in power loss but also it is improving reliability improvement.