A method was presented to evaluate the reliability of axially loaded pile groups designed using the traditional concept of group efficiency along the lines of load and resistance factor design. Group effects and system effects were identified as the major causes that led to a significantly greater observed reliability of pile foundations than calculated reliability of single piles. Statistical analyses were conducted to evaluate these effects based on observed pile performance. A database of pile group load tests was collected and interpreted for this purpose. Subsequently, the reliability of pile groups associated with the allowable stress design practice was calculated using the suggested method. The calculated probability of failure of pile groups was found to be one to four orders of magnitude smaller than that of single piles, depending on the significance of group effects and system effects. Finally, values of the target reliability index β TS for single piles required to achieve a specified target reliability of pile group foundations were calculated for several design methods. Due to group effects and system effects, the values of β TS should be different for single piles, a pile group, and a pile system of several groups.