Abstarct: Increasing demand for electrical energy and power electronic devices, leads to reduced power quality level, so the management of modern power systems and reactive power supply using distribution static compensator (D-STATCOM) with fast response to power changes as well as injecting or absorbing reactive power in different system conditions have been better than other Compensator devices. In this thesis, a new method is proposed for optimizing the size and location of the D-STATCOM for increasing the power quality and improving the overall network conditions. In the proposed method, by calculating the Fast Voltage Stability Index (FVSI), the candidate buses of the system are determined for placement of the compensator. The objective function is to minimize the active power loss, reactive power loss, the installation cost, maintenance and operation of D-STATCOM on the forecast planning horizon with considering constraints of total harmonic distortion voltage and system bus voltages. In this thesis, the backward - forward load flow and combination of analytical – mexta-heuristic approaches baxsed on FVSI are proposed. The proposed method reduces the search space to solve the problem and increase the accuracy of the computation. The accuracy of the proposed method is verified by investigating the simulation results of IEEE 18 - bus test system, IEEE 33 bus distribution system and sarcheshmeh copper complex radial distribution network in the city of Rafsanjan.