Abstract This paper presents differential evolutionary algorithm for optimal dispatch for reactive power and voltage control in power system operation studies. The problem is formulated as a mixed integer, nonlinear optimization problem taking into account both continuous and discrete control variables. The optimal setting of control variables such as generator voltages, tap positions of tap changing transformers and the number of shunt reactive compensation devices to be switched for real power loss minimization in the transmission system are determined. In the proposed method, the inequality operational constraints were handled by “penalty parameterless” approach. This helps in avoiding the time-consuming trial and error process for fixing the penalty parameter and makes the process system independent. The algorithm was tested on standard IEEE 14,30,57 and 118-Bus systems and the results compared with conventional method.