In multi-state systems (MSS) reliability problems, it is assumed that the components of each subsystem have different performance rates with certain probabilities. This leads into extensive computational efforts involved in using the commonly employed universal generation function (UGF) and the recursive algorithm to obtain reliability of systems consisting of a large number of components. This research deals with evaluating non-repairable three-state systems reliability and proposes a novel method based on a Markov process for which an appropriate state definition is provided. It is shown that solving the derived differential equations significantly reduces the computational time compared to the UGF and the recursive algorithm.