This paper describes the development of an efficient algorithm for the optimization of fluid power circuits. The algorithm is based around the concepts of Tabu search, where different time-scale memory cycles are used as a metaheuristic to guide a hill climbing search method out of local optima and locate the globally optimum solution. Results are presented which illustrate the effectiveness of the method on mathematical test functions. In addition to these test functions, some results are presented for real problems in hydraulic circuit design by linking the method to the Bathfp dynamic simulation software. In one such example the solutions obtained are compared to those found using simple steady state calculations.