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This paper presents a novel differential evolution (DE) algorithm, with its improved version (IDE) for the benchmark functions and the optimal reactive power dispatch (ORPD) problem. Minimization of the total active power loss is usually considered as the objective function of the ORPD problem. The constraints involved are generators, transformers tapings, shunt reactors, and other reactive power sources. The aim of this study is to discover the best vector of control variables to minimize power loss, under the premise of considering the constraints system. In the proposed IDE, a new initialization strategy is developed to construct the initial population for guaranteeing its quality and simultaneously maintaining its diversity. In addition, to enhance the convergence characteristic of the original DE, two kinds of self-adaptive adjustment strategies are employed to update the scaling factor and the crossover factor, respectively, in which the detailed information about the two factors can be exchanged for each generation dynamically. Numerical applications of different cases are carried out on several benchmark functions and two standard IEEE systems, i.e., 14-bus and 30-bus test systems. The results achieved by using the proposed IDE, compared with other optimization algorithms, are discussed and analyzed in detail. The obtained results demonstrated that the proposed IDE can successfully be used to deal with the ORPD problem. [ABSTRACT FROM AUTHOR]