Recently, integration of Distributed generation (DG) in distribution system has increased to high penetration levels. The impact of DG on various aspects of distribution system operation, such as reliability and energy loss depend highly on DG location in distribution feeder .Optimal DG placement plays an important role . This project presents a new methodology using Artificial Bee Colony algorithm (ABC) to find the optimal size and optimum location for the placement of DG in the radial distribution networks for active power compensation by reduction in real power losses .The proposed technique is tested on standard IEEE-33 bus test system