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Power system stabilizers are used to generate supplementary control signals for the excitation system in order to damp the low-frequency power system oscillations. Although static VAR compensators (SVC) are basically used for voltage control of long distance bulk power transmission lines, they can be also utilized to improve the dynamic stability of the power system by using a supplementary control loop. However, uncoordinated design of SVC and PSS may cause destabilizing interaction. In order to enhance power system dynamic stability this paper presents a new method to design both PSS and SVC parameters coordinately using real code genetic algorithm. Simulation results of multi-machine system confirm the advantage of using this method.