Abstract: Computational Fluid Dynamics(CFD) and optimization technique are combined in this paper for the purpose of optimal aerodynamic design of transonic airfoil. In this method, 2-D Euler equations are numerically solved to simulate the flow around airfoil using finite volume method, then geometric conditions, optimization equations are implemented to modify the airfoil through shape functions. The two steps are iterated until optimal aerodynamic performance of airfoil is achieved under certain conditions. Two cases, both based on the original airfoil of NACA0012, are presented to show the efficiency of this method.