This paper presents an operation sequence-based approach for determining machine cell layout in a cellular manufacturing environment. The proposed model considers the sequence of operations in evaluating the intercell and intracell movements. In this paper, design of cellular layout has an objective of minimization of total material flow among facilities, where the total material flow is defined as a weighted sum of both intercell and intracell part movements. The proposed algorithm is developed by using genetic algorithm and can be used to design an optimal cellular layout which can cope with changes of shop floor situation by considering constraints such as the number of machine cells and the number of machines in a machine cell.