The use of non-linear loads and the integration of renewable energy in electricity network can cause power quality problems, especially harmonic distortion. It is a challenge in the operation and design of the radial distribution system. This can happen because harmonics that exceed the limit can cause interference to equipment and systems. This study will discuss the determination of the optimal location and capacity of distributed generation (DG) and network reconfiguration in the radial distribution system to improve the quality of electric power, especially the suppression of harmonic distribution. This study combines the optimal location and capacity of DG and network reconfiguration using the particle swarm optimization method. In addition, this research method is implemented in the distribution system of Bandar Lampung City by considering the effect of using nonlinear loads to improve power quality, especially harmonic distortion. The inverter-based DG type used considers the value of harmonic source when placed. The combination of the proposed methods provides an optimal solution. Increased efficiency in reducing power losses up to 81.17% and %total harmonic distortion voltage (THDv) is below the allowable limit.