Abstract: From the viewpoint of state estimation and observability,this paper studies the optimal design scheme of distribution terminals when distributed generation is connected to distribution network. The objective function of this scheme is to minimize the number of distribution terminals,determining the relevant restrictive parameters and constructing a research model according to the observability of distribution network,and then running under the environment of Matlab genetic algorithms. Finally a typical international feeder radial distribution network model,the IEEE 33-bus distribution network,is used as an example to verify that the optimal design scheme satisfies the objectives of complete observability and reducing outage losses of the system.