Abstract: From voltage stability point of view, maximum permissible loading limits must not be exceeded in operation of power systems. In this study, a maximum power transfer phasor diagram is proposed for easy evaluation the relations between major parameters affecting voltage stability margins. In construction of that diagram, local bus measurements and estimated parameters of Thevenin equivalent for N-bus power system are used. Critical values for major parameters and a voltage stability margin are evaluated from the constructed phasor diagram.