AbstractTransmission network is spread over a vast area subjected to harsh environment and monitored from remote control centers. To ensure uninterrupted transfer of electrical power, continuous monitoring and controlling of the transmission lines is essential. The use of RTUs at strategic locations in the transmission system for monitoring system parameters limits the complete observability of the system providing partial information about the system. This paper discusses an algorithm to detect line outages in the transmission system using the bus voltage phasor measurement available from PMUs in conjunction with change in the system topology arising due to line outage. The algorithm also suggests the minimum number of PMUs required for effective line outage detection for a given system. The system under consideration was simulated in MiPowerTM software to obtain the bus voltage angle and the algorithm to detect effective line outage was programmed using MATLAB. Initially, PMUs were assumed to be placed at all buses in the system to detect line outage and the efficacy of the algorithm was checked and proved. The number of PMUs in the system was then reduced by removing them from the buses with least priority, based on their generation capacity and amount of real power consumed by connected load, to arrive at the minimum number of PMUs. The technique was successfully implemented on IEEE14-bus and IEEE 30-bus system. The minimum number of PMUs required for effective line outage detection was determined successfully in both the systems.