To improve the dynamic stability of power systems, by increasing the damping torque of the synchronous machine, it is necessary to use the power system stabilizers to enhance the damping during low frequency oscillations. In this article, an attempt has been made to design the parameters of power system stabilizer by using the Firefly Algorithm applied to the single machine infinite bus system to an amenable form. The stability enhancement has been compared with Genetic Algorithm stabilizer for different operating conditions. The results show that the designed power system stabilizer based on Firefly Algorithm gives a good dynamic response when compared to Genetic Algorithm power system stabilizer. The Pseudo Spectrum analysis is also presented which is evident about the enhanced stability of the system with the proposed Algorithm.