Abstract This paper presents a new global optimal Phasor Measurement Unit (PMU) placement approach based on branch and bound algorithm. The proposed technique provides the global minimum number and locations of PMUs for any power system. Different objective functions are investigated including (i) minimum number and optimum location of PMUs for full observability, and (ii) maximum system observability with specific number of PMUs (PMU Investment phasing). Moreover, the loss of a power system element or a PMU is also considered. The effects of modeling zero-injection buses and using power flow measurements on the quality of the outputs and real-time studies are presented. The proposed technique is applied to the IEEE 14-, 30-, 57- and 118-bus systems using the MATLAB platform. A comparison between the proposed technique and recently published work is held. The proposed method improves the integer linear programming accuracy, shows superiority over other techniques, and reduces the overall cost.