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Distributed Generators (DGs) are now commonly used in distribution systems to reduce the power disruption in the power system network. Due to the installation of DGs in the system, the total power loss can be reduced and voltage profile of the buses and reliability of the system can be improved. The significant process to decrease the total power loss and to improve the power quality of the system is to identify the optimal number of DGs and their suitable locations in the system. To accomplish the aforementioned process and to evaluate the amount of power to be generated, a new method is proposed using Particle Swarm Optimization. The proposed method is tested for IEEE 30 bus system, by connecting optimal number of DGs in the system. The results showed a considerable reduction in the total power loss in the system and improved voltage profiles of the buses and reliability indices.