In order to overcome the shortages of diagnostic method for distribution networks considering the reliability assessment, this paper proposed a method based on power supply safety standards. It profoundly analyzed the security standard of supply for urban power networks, and established quantitative indicators of load groups based on different fault conditions. Then a method suitable for diagnostic evaluation of urban distribution networks in China was given. In the method, “N-1” calibration analysis of the distribution network was conducted. Then the results are compared with quantitative indicators of load groups on different conditions deriving the diagnostic conclusions and the standard revision is discussed. The feasibility and accuracy of the method is finally verified in the case study.