Abstract: Product design projects are facing a problem of severe schedule and cost overruns. Underestimation of design effort during project planning is the major cause. In this paper, we first analyzed the product design process based on function decomposition. Then we defined the main effort influence factors such as product complexity, technical difficulty, design team capacity and management complexity. Finally, we developed a product design effort estimation model based on function decomposition, using artificial neural network method. And the performance evaluation results showed that the ANN model was a promising method to provide accurate estimations for engineering design projects.