DescriptionSystems with spatially distributed units, e.g. Unmanned Aerial Vehicle (UAV), are emerging in aerospace and military industries. In this dissertation, we present approaches for the reliability estimation of such systems. In particular, we consider k-out-of-n pairs:G Balanced systems and weighted-c-out-of-n pairs:G Balanced systems with spatially distributed units which must meet balance requirements. We first estimate the reliability metrics for k-out-of-n pairs:G Balanced systems by considering systems as failed when unbalanced system states occur. We further investigate such systems by balancing unbalanced states: When unbalanced states occur, the system is balanced by forcing down one or more operating pairs into standby. The reliability estimation is computationally expensive for such systems with a large number of units. Therefore, we develop an efficient approach for reliability approximation with high accuracy based on Monte Carlo simulation. Also, we investigate the system reliability further by assuming that the units are subject to degradation. In many situations, units exhibit degradation that can be monitored. We model the degradation path of any unit based on collected observations of the degradation indicator and its physics-based or statistics-based degradation rate. We consider the effect of units’ operating conditions on their degradation paths. Moreover, available system capacity is an important indicator of a system's condition. A system fails when its capacity drops below a minimum value. We estimate the reliability metrics of weighted-c-out-of-n pairs:G Balanced systems, which considers the capacities of individual units. We investigate the problem in two scenarios: First, we assume that the capacity of any unit has multiple levels. Second, we assume that the capacity of any unit has two levels (either working or failed) whereas different units may have different capacities. In the second scenario, we consider load-sharing effect. Furthermore, optimal design for systems with spatially distributed units is the key to maximizing the reliability of the systems given the constraints such as the upper bound for the total number of units and load-sharing effect. We study the optimal configuration that maximizes the system reliability metrics.