This paper presents an optimization of the performance of a recently proposed virtual sliding target (VST) guidance scheme in terms of maximization of its launch envelope for three-dimensional (3-D) engagements. The objective is to obtain the launch envelope of the missile using the VST guidance scheme for different lateral launch angles with respect to the line of sight (LOS) and demonstrate its superiority over kinematics-based guidance laws like proportional navigation (PN). The VST scheme uses PN as its basic guidance scheme and exploits the relation between the atmospheric properties, missile aerodynamic characteristics, and the optimal trajectory of the missile. The missile trajectory is shaped by controlling the instantaneous position and the speed of a virtual target which the missile pursues during the midcourse phase. In the proposed method it is shown that an appropriate value of initial position for the virtual target in 3-D, combined with optimized virtual target parameters, can significantly improve the launch envelope performance. The paper presents the formulation of the optimization problem, obtains the approximate models used to make the optimization problem more tractable, and finally presents the optimized performance of the missile in terms of launch envelope and shows significant improvement over kinematic-based guidance laws. The paper also proposes modification to the basic VST scheme. Some simulations using the full-fledged six degrees-of-freedom (6-DOF) models are also presented to validate the models and technique used.