In the thermal design of embedded multi-chip module (MCM), the placement of chips has a significant effect on temperature field distributing, thus influences the reliability of the embedded MCM. The thermal placement optimization of chips in embedded MCM was studied in this paper, the goal of this work is to decrease temperature and achieve uniform thermal field distribution within embedded MCM. By using ANSYS the finite element analysis model of embedded MCM was developed, the temperature field distributing was calculated. Based on genetic algorithms, chips placement optimization algorithm of embedded MCM was proposed and the optimization chips placement of embedded MCM was achieved by corresponding optimization program. To demonstrate the effectiveness of the obtained optimization chips placement, finite element analysis (FEA) was carried out to assess the thermal field distribution of the optimization chips placement in embedded MCM by using ANSYS. The result shows that without chips placement optimizing the maximum temperature and temperature difference in embedded MCM model are 87.963°C and 2.189°C respectively, by using chips placement optimization algorithm the maximum temperature drop than the original 0.583°C and the temperature difference is only 0.694°C . It turns out that the chip placement optimization approach proposed in this work can be effective in providing thermal optimal design of chip placement in embedded MCM.