With the scientific and technical revolution going on, integrated circuit has been playing a vital role in our daily life ever since. In IC (Integrated circuit) design and manufacturing, layout of the integrated circuit determines its success or failure. However, the constantly decreasing characteristic size and progressive process bring about some new issues. That is why in post-Moore’s Law period, the design and optimization of layouts deserves attention of the whole industry. A properly designed and optimized layout not only results in better performance while using, but also cut out the cost of manufacture. In this paper, the methodology of integrated circuit layout design and optimization are discussed. For design, the author presented the whole flow of how the layout is generated and principles in integrated circuit design. For optimization, two approaches are analyzed. One is shorting out the critical area. Based on critical area theory and methodology of image processing, layouts can be improved in configuration. The method discussed here makes a modification on the previous way to make the optimization more accurate and efficient. The other method is inserting auxiliary polysilicon, which can counteract the impact of channel length change of MOSFETs and focus error as a unavoidable result of the process improvement.