This paper presents a new algorithm to optimize reactive power procurement through commercial transactions considering system voltage security. The proposed algorithm minimizes reactive power provision and transmission loss costs in addition to maximizing system voltage security margin through a multiobjective function. In order to maintain the voltage profile of power system during sever contingencies or due to load uncertainty, all voltage control areas (VCA) of the system are detected and then optimal reactive power reserve is provided for each VCA during the market settlement. A four-stage multiobjective mathematical programming method is proposed to settle the reactive power market. The proposed algorithm has been applied on IEEE-RTS test system. The simulation results show the effectiveness of the proposed algorithm for reactive power market management. (C) 2011 Elsevier Ltd. All rights reserved.