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There are often planned (for example, regular maintenance) and unplanned (for example, pipe bursts) interruptions in a water distribution network (WDN). Therefore, part of the isolation valves must be closed to isolate the part (segment) of the network that contains one or more pipes. Isolation of the target pipe segment with minimum possible disruption has been a problem to be solved. A large number of studies have been conducted to optimize the design of isolation valve placement in new WDNs, but less attention has been given to reducing the isolation zone and improving the reliability of old WDNs by adding optimally placed isolation valves. Therefore, this paper proposes a multiobjective optimization model for adding optimally located isolation valves to old WDNs, which considers the dual objectives of economy and reliability. The installation or removal of isolation valves can cause the original segments to split or merge, so this paper proposes the use of the segment-valve (SV) graph local update (SVLU) algorithm instead of the seed-filling algorithm to construct the SV graph. The optimization model was applied to the valve layout modification of part of the WDN in Changshu, Jiangsu Province, China, and the results showed that the model can solve the optimization solution quickly (15.358 s). Moreover, the use of the SVLU algorithm improved the efficiency of the solved model by 26.71%. [ABSTRACT FROM AUTHOR]