Distribution system is a part of an electric power system which links the high voltage transmission networks with the end consumers. It has low voltage and high amount of current. Modified algorithm for optimizing capacitor placement, sizing and network reconfiguration in a power system for the purpose of reducing system power losses and enhancing voltage profile has been proposed. This proposed modified algorithm addresses important issues in the existing system to have more efficient and excellent power system. Various related works from prestigious journals that concern about voltage profile enhancement and power losses minimization are discussed in detail and summarized as well. Selective particle swarm optimization (SPSO) method is used for simultaneous network reconfiguration and optimal capacitor banks integration in the existing network considering different loading conditions as a scenario. The main objective of this study is to minimize real power losses and enhance voltage profile of the distribution system using the previous mentioned technique. Sensitivity factor analysis with real and reactive power flow were utilized to identify the candidate buses for capacitor bank allocation. This reduces the search space for the algorithm and increase its rate of convergence. The suggested method is programmed in MATLAB R2016b software and tested using IEEE 33-bus radial distribution system. As stated, the SPSO method performs better in terms of reducing both real and reactive power losses. The real power loss percentage reduction of the test system is 48.156%, 50.252% and 52.157% whereas the reactive power loss percentage reduction is 28.409%, 32.859% and 35.745% for light load, normal load, and heavy load respectively. Also, the minimum voltage level in the worst case is significantly enhanced from 0.8841pu to 0.9510pu. Generally, the simulation results show that the proposed technique is effective to maintain all buses voltage magnitude within the IEEE acceptable limit and to reduce power losses significantly. As the economic evaluations should that the proposed project is cost-effective and can be valid as investment.