Distributed generation (DG) devices can be strategically placed in power systems for grid reinforcement,minimizing real power losses, improving bus voltages and efficiency of distribution system. The optimal DG placement (OPDG) method is used to provide the best locations and sizes of DGs to optimize electrical distribution network operation taking into account DG capacity and voltage constraints. In this paper, an efficient SPSO (Selective Particle Swarm Optimization)algorithm is presented to solve the optimal DG placement problem in radial distribution systems. Objective function is formulated for determining the optimal location and sizing of distributed generation (DG) units in the distribution network for active power loss reduction and voltage profile enhancement. Type-I DG is used to solve the problem. Maximum DG penetration level is considered in a range of 0–50% of total load. Proposed solution methodology has been implemented and tested on IEEE 33 and 69 standard bus system. Test results are also compared with latest optimization techniques and found that the proposed algorithm is more effective.