Intercity Demand Responsive Transit (IDRT) systems, providing on-demand “door-to-door” services for intercity travelers, have been recently implemented in a few cities and gained popularity. To devise a theoretical tool for designing efficient IDRT systems, this study proposes a continuous approximation (CA) model to describe the operation metrics of the IDRT. In a two-city system, an optimization model is proposed to study the zoning strategies in the main city, the service area in the satellite city, and headways. The objective is to minimize the average system cost, including the costs of both the operators and the passengers. A two-stage partition algorithm is proposed to generate a near-optimal solution by combining the greedy algorithm and sensitivity-based coordination optimization method. Subsequently, we develop a direct solution algorithm to establish a lower bound for the optimal solution, facilitating a comparison with the near-optimal solution. Throughout all sensitivity analyses, the gaps between the near-optimal solution and the lower-bound solution remain below 3 %. The comparison results demonstrate that the computation time and solution quality of the two-stage partition algorithm are considered acceptable. Simulation is performed to test the validity of the CA model, and the errors in the average system costs are less than 1.16 %. Sensitivity analyses are carried out to evaluate the impacts of several key parameters (e.g., demand densities and line-haul distances) on the optimization results. By comparison with Intercity Fixed Route Transit (IFRT), it can be seen that the choice of IDRT depends on passengers' preference for door-to-door transportation. This study may serve as a valuable reference for the practical implementation of IDRT.