This paper presents an efficient algorithm for determining the location, size and number of capacitors in unbalanced radial distribution system. The objective function formulated consists of two terms: cost for energy loss and cost related to capacitor purchase and capacitor installation. The cost function associated with capacitor placement is considered as step function due to banks of standard discrete capacities. Genetic algorithms(GA) are used to obtain the population is derived. The strings in each population consist of the bus number index and size of capacitors to be installed. In order to determine the number of capacitor placement, the length mutation operator is used. Its efficiency is proved through the application in unbalanced radial distribution systems made of 10 buses with 9 distribution lines and 25 buses with 24 distribution lines.