To further optimize mining methods and parameters at regions of “protecting water mining”, this paper has made modeling and numerical optimal simulation of coal pillar’s failure process under two kinds of mining method including “taking 8 remaining 7” leaving the region pillars and “taking 12 remaining 8” leaving strip coal pillars for Yubojie coal mine in northern Shaanxi province in China. Simulation showed that the stability of strip coal pillars is better than the region coal pillars at the same advancing distance. The region coal pillars first appeared corner plastic failure and maybe become hexagonal pillars. Plastic failure of the rectangular pillar extended and penetrated from the corner along the edge. Plastic damage of pillars showed tendency from the middle to the roadway side of the face along the length direction of face. Stability of central elastic core of coal pillar is the basis of pillar stability. Simulation results showed that it is feasible to optimize mining methods and parameters of “protecting water mining" areas based on modeling and numerical simulation of pillar failure process. The method has provided a useful reference to mining method and optimization design research for other regions with same type of domestic and international coal mines.