It can be useful to reduce a FSM to its minimal form, where the machine contains the minimum number of states necessary to accept its language.
Using the implication chart method, reduce the machine below to its minimal form.

For each pair of states, determine if the states are distinguishable. States are distinguishable if there exists an input sequence that is accepted from one state but not from the other.
If a pair are indistinguishable, combine them until only distinguishable states remain.
State pairDistinguishable?