In order to deal with the power quality problems caused by the wide application of power electronic devices in present distribution network, an optimal allocation method of distributed generators (DGs) with the harmonic distortion and voltage sag loss taken into consideration is presented. A multi-object optimization model, which sets the minimums of the active power loss, the load loss due to the voltage sag and the cost of DGs as optimization objectives, is established by this method. And the harmonic distortion limit is added as an extra constraint along with the equality and inequality constraints of distribution power flow. The nondominated sorting genetic algorithm-II (NSGA-II) is applied to solving the multi-objective model. A case study was conducted on the IEEE 33-bus distribution system. The results show that the DG allocation scheme by the presented method can decrease the power loss, total harmonic distortion and voltage sag loss.