Abstract: Take the total annual cost as an optimal object, this paper establishes the mathematical model for optimal design of insulation layer thickness of buried oil pipeline, and develops optimal design software. An optimal design on the insulation layer thickness of buried oil pipeline for an oil production complex in Daqing Oilfield is made, and comparison and analysis are also made between optimal design result and actual measured result. The authors consider that the insulation depreciation cost. heat loss cost and power cost must be taken into account when the insulation layer thickness of buried oil pipeline is determined.