This paper develops an improved tabu search algorithm (ITS) for economic dispatch (ED) with noncontinuous and nonsmooth cost functions. ITS employs a flexible memory system to avoid the entrapment in a local minimum and developed the ideal of "distance" to the fitness to accelerate optimization. The new approach extends simple tabu search algorithm (STS) to real valued optimization problem and applies parallelism to weaken the dependence of the convergence rate of modified tabu search algorithm (NITS) on the initial condition. Effectiveness of the method was compared with many conventional methods. Results show that the proposed algorithm can provide accurate solutions with reasonable performance and has a great potential for other applications in the power system.