The modern day power system is witnessing a tremendous change. There has been a rapid rise in the distributed generation, along with this the deregulation has resulted in a more complex system. The power demand is on a rise, the generation and trans-mission infrastructure hasn't yet adapted to this growing demand. The economic and operational constraints have forced the system to be operated close to its design limits, making the system vulnerable to disturbances and possible grid failure. This makes the study of voltage stability of the system important more than ever. Generally, voltage stability studies are carried on a single phase equivalent system assuming that the system is perfectly balanced. However, the three phase power system is not always in balanced state. There are a number of untransposed lines, single phase and double phase lines. This thesis deals with three phase voltage stability analysis, in particular the voltage stability index known as L-Index. The equivalent single phase analysis for voltage stability fails to work in case of any unbalance in the system or in presence of asymmetrical contingency. Moreover, as the system operators are giving importance to synchrophasor measurements, PMUs are being installed throughout the system. Hence, the three phase voltages can be obtained, making three phase analysis easier. To study the effect of unbalanced system on voltage stability a three phase L-Index based on traditional L-Index has been proposed. The proposed index takes into consideration the unbalance resulting due to untransposed transmission lines and unbalanced loads in the system. This index can handle any unbalance in the system and is much more realistic. To obtain bus voltages during unbalanced operation of the system a three phase decoupled Newton Raphson load ow was used. Reactive power distribution in a system can be altered using generators voltage set-ting, transformers OLTC settings and SVC settings. All these settings are usually in balanced mode i.e. all the phases have the same setting. Based on this reactive power optimization using LP technique on an equivalent single phase system is proposed. This method takes into account generator voltage settings, OLTC settings of transformers and SVC settings. The optimal settings so obtained are applied to corresponding three phase system. The effectiveness of the optimal settings during unbalanced scenario is studied. This method ensures better voltage pro les and decrease in power loss. Case studies of the proposed methods are carried on 12 bus and 24 bus EHV systems of southern Indian grid and a modified IEEE 30 bus system. Both balanced and unbalanced systems are studied and the results are compared.