By increasing load demands and extending power networks to respond to customers’ needs, the complexity and integration of power systems have been boosted, increasing the system’s short circuit current level, which may threaten the network’s reliability. Over the years, some approaches have been proposed to deal with this issue. Proper examples are reconfiguring networks, increasing circuit breakers (CBs) capacity, and implementing fault current limiters (FCLs). Reconfiguration and increasing CB rating have applied exorbitant costs to the system, and in some cases, it may be infeasible. Hence, FCLs can play a pivotal role in the mitigation of the fault current level, but the effectiveness of FCLs depends on the numbers and impedance of FCLs. In this paper, a novel and multi-objective approach is presented to optimize three objective functions simultaneously: decreasing the short circuit level, increasing the systems reliability level, and minimizing the costs of FCL installation. The adaptive penalty factor and Pareto-based multi-objective evolutionary algorithm based on decomposition are used to optimize the objectives mentioned above. Numerical and graphical results of optimization studies in MATLAB software on the IEEE RTS 24-Bus system confirm the proposed method’s competence.