This paper proposes an approach for optimal placement of phasor measurement units (PMUs) for complete observability at normal and emergency conditions such as any single line outage or any single PMU loss using ant colony optimization (ACO) algorithm. The objective function is to find theoptimallocations of PMUs and the minimum number of PMU channels by optimizing the logic decision of control variables, under the observability constraint.   The ACO algorithm is applied to the standard IEEE 14-bus, 30-bus and New England 39-bus systems. Add to that, an application of the proposed algorithm to a real power system of the west Delta network (WDN) as a part of the Unified Egyptian Network (UEN) is presented. The results obtained are compared with those obtained using other techniques. Simulation results show that the proposed ACO algorithm is more accurate and efficient for obtaining the optimal placement of PMUs with minimum number of PMU channels, especially with increasing the system size.