Distributed generation connected to the distribution network is the key to smart grid. The location of the distributed generation connected to distribution network and the injection capacity will impact power loss and voltage stability. This paper studies the distributed generation optimal location based on the multi-objective optimization model. Considering the two types of indexes for voltage stability and power loss, the multi-objective optimization and simulation model is established. At the same time, the multi-island genetic algorithm is used for global optimization, which increases the possibility of a global optimal solution. As for feasible solution for multi-objective optimization, the theory of Pareto optimal solution analysis is applied to make the model have more practical engineering significance. Finally, using the standard example of the distribution network, the model and algorithm are verified. The results show that the model has excellent optimization effect and is helpful to the practical application of engineering.