As one of the most important renewable energy resources, wind power has drawn much attention in recent years. The stochastic characteristics of wind speed lead togeneration output uncertainties of wind energy conversion system (WECS) and affect power system reliability,especially at high wind power penetration levels. Therefore,a more comprehensive analysis toward WECS as wellas an appropriate reliability assessment model are essentialfor maintaining the reliable operation of power systems. In this paper, the impact of wind turbine outage probability on system reliability is firstly developed by considering thefollowing factors: running time, operating environment,operating conditions, and wind speed fluctuations. A multistatemodel for wind farms is also established. Numerical results illustrate that the proposed model can be well applied to power system reliability assessment as well assolving a series of reliability-centered decision-making problems of power system scheduling and maintenance arrangements.