Water in Fischer-Tropsch synthesis (FTS) on supported cobalt catalysts is known to deactivate the catalysts. The deactivation involves the reoxidation of highly dispersed cobalt phase by water and water-induced sintering. In both cases, the dispersion state of the cobalt phase in the supported catalyst plays an important role. Therefore, the deactivation kinetics depends on the surface structure of the catalyst. Mathematical models are formulated to describe the deactivation behavior of cobalt catalyst pellets with the dependence on catalyst structure and reaction conditions. On the crystallite scale, a size-dependent deactivation model for individual metal particles is built; on the catalyst scale, the deactivation and growth (shrinking) of each individual metal crystallite in the pellet as well as the radial distribution for temperature and concentrations are accounted for using a population balance equation (PBE) coupled with intraparticle diffusionreaction equations. The model is used for optimization of catalyst design. Results show that both intrapellet diffusion limitation and the particle size distribution have a significant impact on the catalyst deactivation behavior. The optimal value of particle size in a pellet varies in a wide range (8-15 nm) depending on when the system is shut down and the catalyst is replaced. It is possible to obtain a dramatic performance boost by using the optimal particle size.