This paper proposed a novel method for the optimal location of the power system stabilizer (PSS) by integrating the improved particle swarm optimization (IPSO) with the chaotic. The modification in the particle swarm optimization (PSO) is made by introducing passive congregation which is an important biological force which preserves swarm integrity. It helps each swarm member in receiving a multitude of information from other members, and thus decreases the possibility of a failed attempt at detection or a meaningless search. Then, the IPSO and chaotic are hybridized (IPSOC), to improve the global searching capacity and prevent the premature convergence due to local minima. Location of PSS over a wide range of system configurations is formulated as a multi-objective function that is the aggregation of the three objectives related to the damping ratio and damping factor, and the number of PSS. The performance of the proposed IPSOC is compared to PSO through nonlinear time-domain simulation. Finally, the proposed method applies to find out the best candidate machines to be equipped with PSSs. The obtained results show that the new method can find the best locations and the optimum PSSs parameters simultaneously with an excellent global damping performance.