This paper presents the differential evolution (DE) algorithm for solving the optimal distribution system reconfiguration problem for power loss minimization. According to the characteristics of distribution network, an integer encoding method based on independent loop is proposed for reducing the dimension of decision variable. In addition, according to the invalid solution problems existed in the evolution, a criterion based on algebraic connectivity of graph theory is presented for completely removing the invalid solution, further narrowing solution space, and this method is suitable for computing the complicated and practical distribution network; DGs are integrated to reconfiguration network to reduce the network loss and improve the quality of voltage. Finally, simulative results of the IEEE33-bus testing system show that the proposed method has good convergence and global search capability.