In the distribution network, the installation of automated feeder terminal equipment is scattered and the number is large. Optimizing the configuration of its location and quantity is beneficial to shortening the fault location, isolation and repair time when the distribution network is faulty, thereby improving the power supply reliability of the distribution network. In this paper, a FTU hybrid configuration method based on fault visibility of distribution network is proposed. That is to say, on the basis of the distribution network structure without automation, this method optimizes the configuration of monitoring terminal unit, controlling terminal unit or no FTU configuration at the switch. Firstly, the definition of the fault observability of the distribution network is given. On this basis, a distribution network FTU optimal configuration model with the constraint of power supply reliability and economy and the objective of maximum observable fault rate is proposed. According to the characteristics of the model, the genetic algorithm is used to solve the problem, and the optimal scheme of FTU hybrid configuration of distribution network is obtained. The rationality and effectiveness of the proposed method are verified by testing on the RBTS-BUS4 distribution network. This work is supported by Science and Technology Project of State Grid Corporation of China “Research and Demonstration for Urban Distribution Network Metering System Optimization and Key Parameter Identification” (No. SGTJDK00DWJS1700030).