With the orderly liberalization of the electricity selling side and introduction of distributed generation (DG), how to allocate the loss in distribution system fairly and properly is becoming a critical problem, which has influenced the healthy development of electricity market. Thus, this paper proposes a loss allocation method for radial distribution networks with DGs. The method, which is based on power flow solutions and allocates power loss according to the active and reactive power flow of lines, consists of three steps. Firstly, starting from the source nodes (the nodes whose generation is more than their load), the power loss allocated to all nodes is calculated, then, the loss allocated to the loads connected to the nodes can be obtained. Secondly, the power loss allocated to DGs connected to the nodes is also calculated according to the loss allocated to the nodes. But in this step, the loss allocated to the nodes is calculated starting from the slack nodes (the nodes whose load is more than their generation), which is different with the first step. Finally, the normalization of the result is executed. The application of the proposed method in a 17-node distribution system and IEEE 33-node test system are analyzed, and the results compared with other methods demonstrate the fairness and reasonability of the proposed method.