Restructuring and recent developments in the power system and problems arising from construction and maintenance of large power plants, increasing amount of interest in distributed generation (DG) source. Distributed generation units due to specifications, technology and location network connectivity can improve system and load point reliability indices. In this paper, the allocation and sizing of DG in distribution networks are determined using optimization. The objective function of the proposed method is to improve customer-based reliability indices at lowest cost. The placement and size of DGs are optimized using a Genetic Algorithm (GA). To evaluate the proposed algorithm, 34-bus IEEE test system, is used. The results illustrate efficiency of the proposed method.