In this paper, a new network structure is proposed to improve reliability and reduce losses using superconducting fault current limiters (SFCLs) for primary distribution systems. SFCLs are used to tie two (or more) radial primary feeders to form loops. SFCLs diminish the short-circuit current and the looped operation significantly reduces the active power loss while simultaneously increasing reliability. With this technique, there is no need to upgrade the upstream circuit breakers and settings of protection devices when operating in a loop. It is demonstrated that there is a tradeoff between benefits (reliability improvement and loss reduction) and acquisition cost of SFCLs. The technical feasibility and benefits are discussed. A comprehensive economic analysis based on optimization methods is conducted to determine the number and location of SFCLs in a typical system considering costs and benefits. Two case studies are selected: The reliability standard system known as “Bus 4 of RBTS” and the 84-bus distribution network from Taiwan Power Company. The results are compared with conventional distribution system reconfiguration. The comparison makes evident the superiority of the new method.