This paper explores the grey model based PSO (particle swarm optimization) algorithm for anti-cauterization reliability design of underground pipelines. First, depending on underground pipelines’ corrosion status, failure modes such as leakage and breakage are studied. Then, a grey GM(1,1) model based PSO algorithm is employed to the reliability design of the pipelines. One important advantage of the proposed algorithm is that only fewer data is used for reliability design. Finally, applications are used to illustrate the effectiveness and efficiency of the proposed approach.