An efficient topological algorithm is presented for observability analysis. The algorithm has its roots in combinational optimization and relies on the concept of augmenting sequences. The correctness of the proposed algorithm is established by the proofs provided. The performance of the new algorithm is analyzed using two real-life networks. The authors comment on their experience with a numerical observability algorithm, which has been implemented in several power system control centers. Performance comparisons of the proposed topological algorithm with the numerical observability algorithm are also provided.< <ETX xmlns:mml="http://www.w3.org/1998/Math/MathML" xmlns:xlink="http://www.w3.org/1999/xlink">></ETX>