Abstarct: Reduction of losses in distribution network which contributes the most losses in a power system is always subject of high interest. One of the most common methods for reducing the losses and the reactive power compensation is utilizing of shunt capacitors. With reactive power compensation, the objects such as reduction of energy losses, reduction of peak losses and liberation of equipment capacity and improvement of voltage profile would be accessible. The main goal is to find the optimum size and location of shunt capacitors so that the savings are maximized and the constraints are satisfied. With the increase of the nonlinear loads in the power system, the power quality problems have become more important. And considering these problems in the capacitor placement are much important. In this thesis optimum capacitor placement in a distribution network with and without considering the power quality problems has been studied and surveyed by genetic algorithm and beside the reduction of losses in network and improvement of voltage profile, the resonance problem which occurs due to capacitor placement in system has been studied and resolved by presented method. At the end, baxsed on the results of studies, in software MATLAB has been simulated and executed on a 9 buses distribution network and the results of two modes of capacitor placement with and without considering, power quality has been compared.