This paper presents a new computationally efficient improved stochastic algorithm for solving Optimal Power Flow (OPF) in interconnected power systems with FACTS devices. This proposed technique is based on the combined application of Fuzzy logic strategy incorporated in Particle Swarm Optimization (PSO) algorithm, hence named as Fuzzified PSO (FPSO). The FACTS devices considered here include Static Var Compensator (SVC), Static Synchronous Compensator (STATCOM), Thyristor Controlled Series Capacitor (TCSC) and Unified Power Flow Controller (UPFC). The proposed method is tested on single area IEEE 30-bus system and interconnected two area systems. The optimal solutions obtained using Evolutionary Programming (EP), PSO and FPSO are compared and analyzed. The analysis reveals that the proposed algorithm is relatively simple, efficient and reliable.