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A fast and effective service restoration method is proposed for medium-voltage distribution system with distributed generators by combining intentional islanding of distributed generators with network reconfiguration to maximize restoration of out-of-service loads. The whole process is divided into four stages: 1) matching islanding schemes; 2) restoration of network connectivity and distributed generators; 3) network reconfiguration; and 4) optimization of load shedding. Whether the last three stages are executed or not depends on violations of operational constraints. In accordance with the topological feature of distribution system, a new concept of fundamental loop matrix is presented and applied in detecting out-of-service areas, restoration of network connectivity, and network reconfiguration. Simulation studies on the PG&E 69-bus system shows the effectiveness of the proposed approach.