Abstract Assessment of the reliability and reliability sensitivity of positioning accuracy for industrial robots subject to aleatoric and epistemic uncertainties registers a challenging task. This study proposes a new optimized moment-based method for kinematic reliability analysis and its sensitivity analysis, which incorporates the sparse grid (SPGR) technique and the saddlepoint approximation (SPA) method. To start with, the positioning accuracy reliability and its sensitivity models of industrial robots are established via computational optimization techniques and kinematic criteria. The kinematic accuracy reliability and its sensitivity are then calculated. Specifically, the sparse grid technique is adopted to approach the positioning error statistical moments and moment sensitivities. On this basis, positioning accuracy reliability bounds and reliability sensitivity bounds are obtained by the saddlepoint approximation method and optimization techniques. Finally, two practical examples are implemented to demonstrate the proficiency of the currently proposed method against Monte Carlo simulation (MCS) results. The results show that the currently proposed method exhibits superior computational accuracy and efficiency in kinematic reliability and its sensitivity analyses for industrial robots.