This paper presents a novel approach to reactive power optimization in the distribution network. By taking advantage of the characteristics of the distribution network with tree hierarchy, the radial network is decomposed into nested linear equivalent loads and a recursive load parameter calculating method is derived. The entire strategy space is also hierarchically decomposed with each sub-strategy mapped to a set of equivalent load parameters. When two sub-strategies of the same node have similar reactive power and voltage load parameters, the one with heavier local active power loss is eliminated. Therefore the strategy space of each layer of the network is greatly reduced. The algorithm proposed is deterministic and free from initial value selection and convergence issues, which helps achieve fast computing and approximate global optimization. An actual 18-bus distribution system and the IEEE 69-bus system simulation results have verified the correctness and effectiveness of the algorithm. © 2010 State Grid Electric Power Research Institute Press.