With the advancements in the communication and information technology, electric utilities are able to achieve distribution automation. One of its important applications is network reconfiguration. A methodology for the reconfiguration of radial distribution networks with Distributed Generation (DG) considering reliability and power loss is proposed in this paper under normal operating conditions. Initially a pseudo code based tie-switch placement is carried out at end nodes taking geographical constraints and then preceded by siting and sizing of DG at the tie-switch locations using optimization technique. Before system reconfiguration, tie-switches will be in open position. Reliability at load points is calculated using probabilistic reliability models. Dynamic programming is used for finding the minimal cutsets from supply to the load. A search algorithm has been formulated for the reconfiguration problem, considering tie-switches and DGs for loss minimization and reliability improvement meeting load requirement, power balance equations and voltage limits. The proposed methodology has been tested on 33-node and 69-node test distribution systems.