Summary In this paper, the impacts of uncertainties in a multi‐machine power system with high penetration of wind farms are studied. The uncertainties associated with generation units, transmission system and demands are considered as the most important sources of uncertainty. So, an innovative optimized type II fuzzy power system stabilizer (PSS) is proposed to decrease uncertainties and increase the power system dynamic stability margin. Membership of the proposed stabilizer is optimized by multi objective particle swarm optimization algorithm using integral of square error until settling and figure of demerit as objective functions. The simulation results verified the performance of the proposed PSS in all operation conditions.