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An interval type-2 fuzzy logic controller (IT2FLC) is proposed in this paper for the design of power system stabilizer (PSS) of a single machine infinite bus (SMIB) and multi machine infinite bus (MMIB) system incorporated with an AC1A exciter. For controller design, memberships of system variables are represented using interval value fuzzy sets. Fuzzy logic based on interval value sets is capable of modeling the uncertainty and imprecision in a better way. The proposed controller performance is compared with the optimal lead lag and optimal type-1 fuzzy logic controller respectively reference to damp the oscillations of both SMIB and MMIB system. Simulation results reveal the superior performance of the proposed controller and also it is robust with respect to system parameter variation and at different disturbances.