Abstract: Two layer insulation has been widely used in oil and thermal pipelines so as to remedy one layer's defects in compression strength, property of high temperature resistance, stability and water proof property. Based on steady thermal conducting, through mathematic analysis and according to superior economic condition, which is refered to as minimum sum of the expense of insulation material shared by each year and the expense of heat loss of an insulated pipeline, discussion is done with the following result; The necessary requirement for the existance of the economic thickness of two layer insulation is that the product of the first layer's thermal conductivity multiplied by its cost is larger than the product of the second layer's thermal conductivity multiplied by its cost when the first layer is good in insulation effect but high in cost, yet, the second layer poor in insulation effect but low in cost. Otherwise, it should be on the contrary. In the paper, the writer gives the formula for calculating the economic thickness of two layer insulation, with the mathematic model set up together with a chart of calculating procedures, which can be a kind of method provided for design optimization of two layer insulation for oil and thermal pipelines.