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The roll-to-roll (R2R) processing plays an increasingly important role in the high-throughput fabrication of flexible electronics. This paper highlights the dramatic influence of material properties, geometrical dimensions of film-on-substrate structure, process temperatures, and web tension of the R2R processing. A co-optimization approach has been presented for the R2R processing, and all the design and process parameters are to be simultaneously optimized to reduce the interfacial residual stress. First, the misfit strain between the thin film and the substrate is established based on the process parameters. The temperature-dependent properties are involved in polymer/rubber substrate. Nonlinear phenomena are discovered when the process temperatures and the web tension are involved in substrate together. Then, the interfacial shear and peeling stresses resulted from R2R processing are derived in analytical model based on the generalized plane strain theory. The interfacial stresses are related with process temperatures, material properties, and structural dimensions. Finally, a multivariable optimization model is established to compensate the misfit strain. The results imply that device structures and process parameters are correlated phenomena and therefore should be simultaneously optimized in the R2R processing of flexible electronics.