In this paper, optimal tuning problem of power system stabilizer(PSS) using Immune Algorithm(IA) is investigated to improve power system dynamic stability. In proposed method, objective function is represented as antigens. An affinity calculation is embedded within the algorithm for determining the promotion or suppression of antibody. An antibody that most fits the antigen is considered as the solution to PSS tuning problem. The computaton performance by the proposed method is compared with Genetic Algorithm(GA). The porposed PSS using IA has been applied for two sample system, single-machine infinite bus system and multi-machine power system. The performance of the proposed PSS is compared with that of conventional PSS. It is shown that the proposed PSS tuned using immune algorithm is more robust than conventional PSS.