Cell formation (CF) is a key step in group technology (GT). This combinatorial optimization problem is NP-complete. So, meta-heuristic algorithms have been extensively adopted to efficiently solve the CF problem. Particle swarm optimization (PSO) is a modern evolutionary computation technique based on a population mechanism. Since Kennedy and Eberhart invented the PSO, the challenge has been to employ the algorithm to different problem areas other than those that the inventors originally focused on. This paper investigates the first applications of this emerging novel optimization algorithm into the CF problem, and a newly developed PSO-based optimization algorithm for it is elaborated. Forming manufacturing cells lead to process each part family within a machine group with reduction intracellular travel of parts and setup time. A maximum number of machines in a cell and the maximum number of cells are imposed. Some published results in various problem sizes have been used as benchmarks to assess the proposed algorithm. Overall, the advantages of the proposed PSO are that it is rapidly converging towards an optimum, there are fewer parameters to adjust, it is simple to compute, it is easy to implement, it is free from the complex computation, and it is very efficient to use in CF with a wide variety of machine/part matrices.