This paper presents a systematic procedure for partitioning smart distribution systems into supply-sufficient microgrids. First, renewable distributed generations (DGs) are optimally allocated in the distribution system. A multiobjective performance index including voltage profile and energy losses indices is utilized in this problem as the objective function. Two alternative control approaches of future smart grids, including on load tap changer control and adaptive power factor control are assessed to maximize potential benefits and increase the penetration level of DGs. Then, optimal allocation of protection devices and energy storage systems for constructing supply-sufficient microgrids is presented for a feeder equipped with capacity-constrained DGs. To this end, two different optimization problems are formulated and proper indices are developed for minimizing power exchange between microgrids and minimizing generation-load imbalance within microgrids. Finally, test results of the proposed models on 33-bus IEEE radial distribution system are presented and discussed.