A two-step algorithm for the optimal placement of voltage regulators in distribution systems is presented in this paper. In the first step, voltage regulators are placed (and the tap position is determined) at candidate buses, aiming at minimizing voltage drops and real power losses. In the second step, an attempt to reduce the number of voltage regulators is made, taking into consideration economical aspects (minimization of installation and maintenance costs). It is shown that the proposed algorithm is fast, efficient and provides reliable results. © 2009 IEEE. Baran, M.E., Wu, F.F., Optimal sizing of capacitors placed on a radial distribution system (1989) IEEE Trans. on Power Delivery, 4 (1), pp. 735-743. , JanBaran, M.E., Wu, F.F., Optimal capacitor placement on radial distribution system (1989) IEEE Trans. on Power Delivery, 4 (1), pp. 725-734. , JanChiang, H.D., Wang, I.C., Darling, G., Optimal capacitor placement, replacement and control in large-scale unbalanced distribution systems: System solution algorithms a numerical studies (1995) IEEE Trans. on Power Systems, 10 (1), pp. 363-369. , FebChiang, H.D., Wang, I.C., Darling, G., Optimal capacitor placement, replacement and control in large-scale unbalanced distribution systems: system modeling and a new formulation (1995) IEEE Trans. on Power Systems, 10 (1), pp. 356-362. , FebSafigianni, A.S., Salis, G.J., Optimum voltage regulator placement in a radial power distribution network (2000) IEEE Trans. on Power Systems, 15 (2), pp. 879-886. , MayMedeiros Jr., M.F., Filho, M.C.P., Optimal placement of three-phase voltage regulator banks in radial distribution feeders (2002) Proc. XIV Brazilian Congress on AutomaticsShirmohammadi, D., Hong, H.W., Semlyen, A., Luo, G.X., A compensation-based power flow method for weakly meshed distribution and transmission networks (1988) IEEE Trans. on Power Delivery, 3 (2), pp. 753-762. , May