In this paper, an algorithm for obtaining 2-state switching failure function and a terminal pair reliability evaluation method in a communication network are proposed. The communication network is modeled by a graph. By using the sequence of matrix transformations for the graph, minimal cut-set matrix representing all minimal cut-sets which completely interrupt the communication path is determined and 2-state switching failure function is then obtained from the minimal cut-set matrix. The terminal pari reliability of the communication network is evaluated by corresponding the random variables to 2-state switching failure function. Illustrative examples are provided to demonstrate the algorithm. A computer program evaluating the terminal pair reliability in a complex and large network has also been developed.