ABSTRACT Heat pump can be used to recover abundant thermal energy contained in the discharge of municipal wastewater treatment plants. While there are some design standards for common heat pump systems, the design of a sewage source heat pump (SSHP) system is still often based on a fixed heat load and neglects the interdependencies between the equipment sizing and operating parameters. To address the issue that previous design methods have not balanced investment and operational costs well from a global optimisation perspective, this work formulates the simultaneous optimisation of SSHP design and operation as a non-linear programming problem. The proposed model features the consideration of multiple working conditions caused by the impact of ambient temperature variation on the heat load of the SSHP system. The feasibility and potential benefits of the optimised SSHP system are also evaluated by incorporating techno-economic performances and environmental impact analyses into the mathematical framework. A case study is carried out to demonstrate the effectiveness of the proposed methodology. The results show that the total annual cost of the optimally designed and operated SSHP in Harbin could be 9% lower than in Beijing and 39% lower than in Shanghai, suggesting that constructing and running the SSHP system in severe cold regions with great heating demands might be more economical than in less cold regions. The CO2, SO2, and NOx emissions of the SSHP could be approximately 50% less than that of coal-fired boiler heating, and 80% less than that of direct electric heating with coal-fired electricity.