This study designs a limited-stop and local mixed bus service from the perspectives of both transit agencies and passengers based on a proposed optimization model. Close attention was paid to the increase in fares for the limited-stop service in the proposed model to offset the loss in bus fare. The objective function was to minimize the passenger travel time and bus agency costs; the decision variables were the stops for the limited-stop service and the headways of the limited-stop and local services; the constraints included the range of fare increases for the limited-stop service and other factors. The Lingo software and the genetic algorithm were compared in solving the proposed model from the aspects of solving time and results. Because the solutions for the model within the planning time and the influence of the global optimal solution upon parametric analysis were stable, the Lingo software was more suitable for the proposed model. Evaluations of the total costs for the mixed service and local-only service were carried out for different bus corridor lengths. The ratio of the fares for the limited-stop service to the fares for the local service must be within the appropriate range in order to take advantage of the limited-stop service. When the stop spacing and the bus corridor distance were longer, the mixed service was more competitive and noticeable.