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This paper proposes the new concept of preplanned microgrid islanding (PMI) in the smart distribution system. PMI is a special form of controlled islanding that can be used to provide demand-side service for electrical users under the scheduled distribution operation, especially for the preventive maintenance. A simulation-based multi-objective optimization framework is developed to decide the starting time and duration of PMI. The optimization objectives include the minimization of load curtailment, operating cost, and pollutant emission. On one hand, the stochastic short-term simulation method is developed to assess the performance of candidate PMI schemes considering multiple uncertainties and optimal scheduling of microgrid operation. On the other hand, the weighted-sum approach is used to compromise the conflicting objectives according to the decision preferences of users. Furthermore, the response surface methodology is adopted to improve the efficiency of scheme selection with the help of experimental design technique and regression analysis. Finally, the effectiveness and high efficiency of the proposed method is verified in case studies. Sensitivity analysis is also performed to investigate the impact of decision preference, season scenario, and sizing alternative on optimization result. Copyright © 2016 John Wiley & Sons, Ltd. [ABSTRACT FROM AUTHOR]