Phasor measurement units (PMUs) placed in various nodes of power system network facilitates several tasks including optimum power flow, system control, contingency analysis, fault detection etc. For the above purposes, PMU’s are not required to place in all the bus in a power system. Also because of higher cost, optimal placement of PMU’s are done by using the binary search algorithm. The algorithm for optimal placement is tested for standard IEEE 7, 14 & 30 bus systems. Once the PMU’s are placed optimally, the next step involved is the fault location and diagnosis scheme which is capable of accurately identifying the location of a fault upon its occurrence. Two different algorithms has been developed for ring and radial type distribution feeders. These proposed algorithms are tested for different faults on both radial and ring power distribution systems. The scheme is capable of giving results results within 98 % accuracy of the line length.