This paper proposes a new algorithm for the optimal placement of a step voltage regulator(SVR) in distribution system with Distributed Generators(DG) using a Particle Swarm Optimization(PSO). The objective function of this algorithm is to find optimal placement for minimum loss while maintaining each node voltage fluctuations within upper and lower limits. In the objective function of proposed algorithm, the deviations to reference voltage and the distribution loss are considered. To verify effectiveness of the proposed method, simulation is implemented using MATLAB.