In this paper a model is developed for the optimization of distributed information systems. Compared with the previous work in this area, the model is more complete, since it considers simultaneously the distribution of processing power, the allocation of programs and databases, and the assignment of communication line capacities. It also considers the return flow of information, as well as the dependencies between programs and databases. In addition, an algorithm, based on the "bounded branch and bound" integer programming technique, has been developed to obtain the optimal solution of the model. The algorithm is more efficient than several existing general nonlinear integer programming algorithms. Also, it avoids some of the disadvantages of heuristic and decomposition algorithms which are used widely in the optimization of computer networks and distributed databases. The algorithm has been implemented in Fortran, and the computation times of the algorithm for several test problems have been found very reasonable.