Abstract Voltage stability improvement is an important issue in power system planning and operation. Voltage stability of a system depends on the network topology and settings of reactive compensation devices. This research first proposes an improved voltage stability index ( IVSI ) for network systems, and then presents an optimization method for reactive compensation devices settings. To solve the optimization problem, this work introduces the hybrid differential evolution (HDE) to determine tap settings of on-load tap changing (OLTC) transformers, excitation settings of generators or synchronous condensers (SCs), and locations with sizes of static var compensators (SVCs). The performance of this technique is verified using the IEEE 30-bus power flow test system. The results show that the proposed method using the improved voltage stability index and the optimization method is able to effectively enhance voltage stability of a system and reduce line losses.