A zero-dimensional model of a large-scale, low speed, two-stroke marine diesel engine was developed in a Matlab simulation environment. The model was validated by using the experimental data of propulsion characteristics. The effects of compression ratio and ignition point on engine performance parameters at rated operating point were analyzed based on the model. An optimization model was developed to optimize the engine performance under the rated operating condition. In the optimization model, the objective function was the specific fuel consumption, while the constraints were the peak pressure, and the difference between peak pressure and compression pressure, the maximum combustion temperature and exhaust temperature which were within the specified limits, and the design variables were the compression ratio and ignition point. Simulation results of obtained optimized scheme show that the engine performance in terms of fuel consumption and power at rated operating point are both improved.