Dispersed or Distributed Generations (DGs) are becoming more popular on account of socio-economic reasons and also to enhance performance of distribution systems. Cat Swarm Optimization (CSO) is one of the recent swarm-intelligence-based optimization techniques which provides local and global search simultaneously. The aim of this study is to introduce the application of CSO method for optimal allocation of DGs in distribution networks. The problem is formulated to maximize annual energy loss reduction and to maintain a better node voltage profile under piece-wise multi-level load profile using penalty factor approach. Modification is suggested in CSO to enhance its exploration and exploitation potentials. In addition, clever search is proposed to enhance overall performance of the optimizing tool. The proposed method is applied on the benchmark IEEE 33-bus and 69-bus system and the obtained results are promising.