Downsizing a diesel engine using turbocharger and coupling it with exhaust gas recirculation is the recent trend to improve engine performance and emission control. For diesel engines, it is important to match a turbocharger that meets both the low-speed torque and high-speed power requirements. This article presents a method of turbocharger design optimization for a turbocharged diesel engine equipped with exhaust gas recirculation, on the basis of parametric study of turbocharger geometry. Turbocharger through-flow model along with one-dimensional engine model is used to study the effect of key geometric parameters of the compressor and turbine on engine brake torque, brake-specific fuel consumption, air flowrate and cylinder peak temperature. For compressor, the research emphasizes on impeller inlet relative diameter, inlet blade tip angle, impeller exit blade angle and exit blade height, while for turbine parameters such as volute throat area, inlet blade height, inlet diameter, outlet diameter and rotor exit blade angle are taken into account. Results show that in case of compressor, engine performance is sensitive to the inlet relative diameter, inlet blade angle and exit blade angle. In case of turbine, volute throat area, inlet blade height and inlet diameter have vital effect on engine performance. On the basis of results, an optimized turbocharger design is developed. Comparison shows prominent improvement in turbocharger maps and engine performance. Compressor maximum efficiency and pressure ratio are increased from 73% to 77% and 3.166 to 3.305, respectively. Most importantly, the area of compressor maximum efficiency zone is increased considerably. Also turbine efficiency is increased from 71.42% to 76.94%. As a result, engine torque and air flowrate are increased up to 5.26% and 8.31%, respectively, while brake-specific fuel consumption and cylinder peak temperature are decreased up to 5.00% and 4.31%, respectively.