This paper proposes an algorithm to incorporate the reliability network equivalent concept into reliability assessment of complex radial distribution networks (RDNs). Using this concept, there is no need to analyze the system response to every single contingency. Instead, the equivalent impact of a group of contingencies is used to decrease the network dimension. In the proposed algorithm, the reduction takes place at protection zones. The topology of the network is given in matrix form. In different steps, this matrix is modified to derive new matrices, which are then used to perform network reduction, fault isolation, upstream and downstream restoration, and integration of the unsuccessful operation of protective devices. Use of the matrix form makes the algorithm straightforward to implement. The Roy Billinton Test System (RBTS) is used to validate computational efficiency of the proposed algorithm.