This paper presents a novel proximity index based on the cosØ for the static voltage stability analysis to determine the voltage profiles at all the load buses & thus, the identification of the weak buses on the basis of their corresponding voltage profile. Static voltage stability enhancement is performed with the incorporation of UPFC in order to improve the voltage profile at all the weak load buses along with the system stability. For the enhancement, UPFC is placed in between the most weak load buses to improve the proximity index as well as reactive margin of the system. The proximity index is used for the real time voltage stability enhancement using the PSO technique, involving the minimization of the fitness function under the constraints of reactive power generation at the generation side, control efforts, voltage stability limits & the proximity limit of the network. The voltage stability enhancement through optimization using PSO is proposed along with incorporation of UPFC for improving the reactive margin & the corresponding voltage profiles are obtained for the two test cases, viz. IEEE 14 Bus Test System & Indian Utility 75 Bus Test System. MATLAB 7.0 software is involved in the evaluation of various parameters for the above test cases. © 2011 Praise Worthy Prize S.r.l. - All rights reserved.