In this paper, a procedure is presented to optimize ship propulsion systems considering the hull- propeller-engine interactions. The propeller diameter and expanded blade ratio are systematically varied to find out the optimum combinations of RPM and BHP at a given design speed by considering cavitation criteria, and then by comparing the fuel oil consumptions of each main engine candidates which can produce each combination of RPM and BHP, appropriate main engine with the lowest fuel oil consumption together with principal characteristics of the optimum propeller are selected.