She looks so much like her younger sister that I can't tell them apart.
Literal
She [topic-は] younger-sister [to-に] well resembling [because-ので], I [topic-は] two-people [possessive-の] distinction [subject-が] cannot-make.
よく似ているので ('because she resembles her well') gives the reason with ので. 区別がつかない ('can't distinguish') uses the pattern [noun]がつく/つかない for abilities — literally 'distinction doesn't attach.'