This paper presents a method that integrates deterministic approach with fault-tree analysis for reliability assessment of a composite system (generation and transmission in power systems). The contingency screening is conducted in the first step. The results are further classified into three clusters in the second step: normal, local trouble and system trouble. The fault-tree analysis is used to assess the reliability of the composite system in the third step. Finally, Risk Reduction Worth is adopted as a measure of importance for identifying the crucial element that has significant impact on the reliability. In this paper, a composite system in Taiwan serves as an example for illustrating the simulation results attained by the proposed method. The simulation results, verified by Siemens PTI PSS/E TPLAN software package, show that the proposed method is applicable for large scale power systems. (C) 2009 Elsevier Ltd. All rights reserved.