The design of the optimal codebook for a given codebook size and input source is a challenging puzzle that remains to be solved. The key problem in optimal codebook design is how to construct a set of codevectors efficiently to minimize the average distortion. A minimax criterion of minimizing the maximum partial distortion is introduced in this paper. Based on the partial distortion theorem, it is shown that minimizing the maximum partial distortion and minimizing the average distortion will asymptotically have the same optimal solution corresponding to equal and minimal partial distortion. Motivated by the result, we incorporate the alternative minimax criterion into the on-line learning mechanism, and develop a new algorithm called minimax partial distortion competitive learning (MMPDCL) for optimal codebook design. A computation acceleration scheme for the MMPDCL algorithm is implemented using the partial distance search technique, thus significantly increasing its computational efficiency. Extensive experiments have demonstrated that compared with some well-known codebook design algorithms, the MMPDCL algorithm consistently produces the best codebooks with the smallest average distortions. As the codebook size increases, the performance gain becomes more significant using the MMPDCL algorithm. The robustness and computational efficiency of this new algorithm further highlight its advantages.