This paper aims to determine the optimal capacitors required for maximum output power of a single-phase self-excited induction generator (SEIG), using a three-phase machine feeding inductive as well as capacitive loads. The generator consists of a three-phase star-connected induction machine with three capacitors and a single-phase load. The algorithm, which gives directly the values of the optimal capacitors for the maximum power output and the maximum power available, has been developed using the steady-state model of the SEIG and sequential unconstrained minimization technique (SUMT). The variations of the maximum power output with power factor (pf) of loads (both inductive and capacitive) and speed of the SEIG have been presented. The voltage regulation of the generator is small due to the effect of the two series capacitors. Experimental results have shown the effectiveness and accuracy of the developed algorithm.