Research on the optimal allocation of a limited number of PMU in power system device.A three Stage method will be adopted to study he optimal allocation of PMU. The method assumes that each bus is installed with PMU initially. The first stage and the second stage of iterative algorithmis used to remove those less important buses of the PMU configuration, and keep the important position of the buses PMU configuration. The three stage of iterative algorithm make a further minimize of the first stage and the second stage, and considering the observability of power system, to ensure the optimal configuration of PMU. According to simulation on IEEE 14 bus and IEEE 30 bus system, and compared with the existing priority algorithm in computation time, Results show that the proposed method have advantages in computation time , and the validity of this method.