The tail driving system based on linear hypocycloid has the advantages of adjustable phase difference, no quick-return, and combining speed reducer with transformation mechanism. The plane complex movement of the driving system was realized via a motion triangle with a linear hypocycloid planetary gear train and a linkage. In this article, we approach the question of which kind of parameter design can make this driving system more efficient in swimming from a hydrodynamic perspective. First, dynamic and hydrodynamic models were established with momentum theorem, Lagrange theorem, and two-dimensional foil theory. And then, hydrodynamic optimization on kinematic parameters (i.e. caudal peduncle's reciprocation velocity and caudal fin swing angle) and structural parameters (i.e. swing amplitude, V planetary carrier's angle, and sun gear's radius) for a better propulsive efficiency was developed in detail. Second, influences of structural parameters on vortex ring were further conducted by numerical simulation in FLUENT. Finally, the prototype and experimental platform of the designed driving system were established, and the theoretical derivation of lift and lateral forces was testified by experiment.