In view of the blind subjectivity of reference set selection in the existing methods, this paper proposes a new generalized fuzzy number ranking method based on reference set and evaluation function. Firstly, the proposed method defines the reference set with the help of fuzzy distance, which has the advantage of reducing the uncertainty increased by the pre-given and selected reference set. Secondly, the evaluation function is constructed by using the centroid of interval similarity and generalized fuzzy numbers, and the framework of a new generalized fuzzy number ranking method is given. In addition, the effectiveness and rationality of the proposed method are verified by comparing it with the existing ranking methods by an example. Finally, the method is applied to the three-way conflict analysis to evaluate the alliances established by different methods.