We reexamine sterile neutrino dark matter in gauged $U(1)_{B-L}$ model. Improvements have been made by tracing and careful evaluation of the evolution of the number densities of sterile neutrinos $N$ and extra neutral gauge bosons $Z'$. As a result, the cosmologically-interesting gauge coupling of $U(1)_{B-L}$ for freeze-in sterile neutrinos turns out to be smaller than the values reported in the literature. This avoids the overproduction of $Z'$ so that it is consistent with the big bang nucleosynthesis and the cosmic microwave background constraints on the effective number of neutrino species. Similarly, the free-streaming length constraints exclude a large parameter space derived in previous studies. In addition to known freeze-in pair production of $N$ from the standard model fermion pairs, we find the case that $N$ is dominantly produced from a pair of $Z'$ at the temperature characterized by the $B-L$ breaking scalar mass. Thus, the naive truncation of the $U(1)_{B-L}$ scalar contribution made in the literature is not valid.
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