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This paper analyzed the method of calculating work resistance and consumed power in hydraulic system in a work cycle of loader, established mathematical model of work resistance, and selected the CYC_TEST_10sec as a work cycle. Based on the simulation software of power performance and fuel economy of loader, we designed the interface mode between simulation software and optimization algorithm. To take the gear ratio of loader as optimization goal and make the cumulative fuel consumption as objective function, we optimized the gear ratio of ZL50 loader with genetic algorithm and calculated its power performance and fuel economy before and after optimization respectively. The results show that the optimization design proposal can improve power performance and fuel economy of ZL50 loader.