Based on energy cascade utilization, the relative radiator area ratio (RRAR) of combined heat and power (CHP)-based district heating (DH) system was optimized. An optimization model for obtaining the optimal RRAR and minimum annual total cost (ATC) was developed. A CHP-based DH system in Tianjin, China, was taken as a case study. The impact of RRAR on the extracted and exhaust heat was analyzed. Moreover, the impact of equipment lifetime, radiator price, electricity price and interest rate on the optimization results was analyzed through sensitivity analysis. Results confirm that the developed model can be used to obtain the optimal RRAR. With the increase of RRAR, the extracted and exhaust heat used in absorption heat pump (AHP) increases, whereas the extracted heat used in heat exchanger related to extracted heat (HEXT) decreases. Correspondingly, the increase of RRAR results in the decrease of the total extracted heat and increase of the total exhaust heat. Enormous economic, energetic and environmental benefits can be achieved through the utilization of the optimal RRAR. According to sensitivity analysis, the radiator price and electricity price have a larger impact on the optimal RRAR, while the impact of electricity price on the minimum ATC is the largest.