This paper presents a methodology for transmission expansion planning using AC optimal power flow. A multi-objective framework has been considered. The objectives are to minimize the investment cost (IC), minimize the operation cost (OC) and also to minimize the power losses. The augmented ε-constraint method was used so as to solve the multi-objective mathematical programming (MMP) problem. The proposed model has been applied to Garver’s six bus test system and also to a real system of northeastern part of the Iranian national 400-kV transmission grid.