To solve the unreasonable energy distribution and excessive energy waste in the steam system of iron and steel (I&S) industry, a mixed integer linear programming model based on the theory of exergy and energy level is developed in this study to optimize the steam system. After optimization, the utilization potential of waste energy is found. Then, several waste energy recovery technologies are compared according to their application results. The results show that the exergy efficiency of steam system is 74.065%. After optimization, the exergy efficiency of steam system is increased by 10.568%, the energy input of the I&S enterprise is reduced by 84.30 MJ t−1‐CS−1, and waste energy potential is found at hot rolling, sintering, and converter. Herein, flue gas waste heat from hot rolling and sintering is recovered using series two‐stage Organic Rankine Cycle with cyclopentane as the working fluid, and steam waste energy from converter is recovered using saturated steam power generation. These waste energy technologies increase the electricity generation of I&S enterprise by 15.25 kWh t−1‐CS−1. Overall, combining the optimization model with the use of waste energy recovery technologies is necessary and effective for I&S enterprise to increase their energy efficiency.