The spatial resolution, detection rate, accuracy and reliability of a particle image velocimeter (PIV) depend critically upon the careful selection of a number of parameters of the PIV system and the fluid motion. An analytical model and a Monte Carlo computer simulation have been developed to analyse the effects of experimental parameters and to optimize the system parameters. A set of six nondimensional parameters that are the most significant in optimizing PIV performance are identified. They are the data validation criterion, the particle image density, the relative in-plane image displacement, the relative out-of-plane displacement, a velocity gradient parameter, and the ratio of the mean image diameter to the interrogation spot diameter. These parameters are studied for the case of interrogation by autocorrelation analysis. By a single transformation, these results can be applied to interrogation by two-dimensional Fourier transform analysis of the Young's fringes.