Abstract: The design optimization of gadolinium rods is determined by analyzing the fuel management technology used for equilibrium cycle, and the optimization methods are to raise the bearing enrichment of the UO₂-Gd₂O₃ pellets and loading fully enriched UO₂ pellets at both ends of the gadolinium rods. The length of fully enriched UO₂ pellets at both ends of the gadolinium rods is determined by analyzing the effects of axial power distribution for different lengths. The bearing enrichment of the UO₂-Gd₂O₃ pellets is also determined by analyzing the effects for fuel economy and fuel manufacture. The effects of core power distribution when raising the bearing enrichment of the UO₂-Gd₂O₃ pellets and loading fully enriched UO₂ pellets at both ends of the gadolinium rods are analyzed individually and systematically. The effects of safety in condition Ⅰ and Ⅱ for design optimization are analyzed. Safety for the UO₂-Gd₂O₃ pellets in optimization case has been confirmed. It is found that the axial power distribution can be improved by loading fully enriched UO₂ pellets at both ends of the gadolinium rods, and the maximum local linear power density of UO₂-Gd₂O₃ pellets under reactivity accidents in condition Ⅱ can be reduced. UO₂-Gd₂O₃ pellets is within the melting limit and the safety margin can be improved by about 5.6% in safety analysis. The fuel cost can be saved by about 23 million yuan per cycle for each core with gadolinium. Thus, the optimization method of gadolinium rods design can be used to improve the fuel management for the operating units.