A modified bacterial foraging technique is applied to solve the multi-objective optimal power flow problem with unified power flow controller (UPFC). The introduction of UPFC in power system improves the stability and it is one of the crucial factors for effective modern power systems. Effective means for controlling and improving power flow is done by installing fast reacting devices such as a Unified Power Flow Controller (UPFC).The application of modified bacterial foraging technique is applied to find optimal location of unified power flow controller to achieve solution of optimal power flow and this problem is formulated by multi-objective optimization using bacterial foraging technique. The optimal power flow problem is used to minimize the overall cost functions, which include the total active and reactive production cost function of the generators and installation cost of UPFCs and also the OPF constraints are generators, transmission lines and UPFCs limits are included. Modified Bacterial foraging algorithm and multi-objective optimization technique is applied to the problem with use of controllable UPFC devices is proposed. The specified power flow control constraints due to the use of UPFC devices are included in the OPF problem in addition to these normal conventional constraints. The sensitivity analysis is carried out for the location of UPFC devices. This provides an enhanced economic solution with the use of controllable of UPFC devices. Simulations are performed modified IEEE 4 bus and IEEE 30 bus system for optimal location of UPFC and the results obtained are encouraging and will be useful in electrical restructuring.