In order to obtain structural optimization design of rear banjo axle housing, a seven degree of freedom dynamic model of vehicle was presented. Based on the model, vehicle vibrating equations were presented. Random phase method was used to generate C grade road surface irregularity of time history that applied to vibrating equations to acquire dynamic load imposed on the banjo axle housing. A detailed CAD model of the housing was developed by using of UG software. The finite element model of the housing was built, and the stress and strain of the housing were obtained by using of ANSYS Workbench software. The mathematical model of optimal design was constructed and analyzed based on the result of finite element method. The optimization result shows that the weight of banjo axle housing can be reduced under satisficing the stress and strain condition that excited by dynamic load.