Transmission efficiency is one of the main technical indicators for evaluating the transmission performance of a cycloid pin gear planetary reducer. The cycloid pin gear pair is a crucial component of such a reducer. When the design parameters of the cycloid pin gear pair are determined, its transmission efficiency is often considered a constant, which significantly hinders accurate calculations of the transmission efficiency of the cycloid pin gear planetary reducer. To address this issue, this paper introduces a dynamic transmission efficiency analysis method specifically tailored for the cycloid pin gear pair, grounded firmly in dynamic characteristic analysis. Firstly, a comprehensive and meticulous dynamic performance analysis method is proposed for the cycloid pin gear pair, enabling precise calculations of dynamic transmission efficiency. Secondly, an optimization framework is introduced, with a primary focus on enhancing the transmission efficiency of the cycloid pin gear pair. A transmission efficiency assessment model is established as the objective function, which takes into account the pressure angles of both the driving gear and the driven gear at the meshing position. To demonstrate the practical utility and effectiveness of these methodologies, an illustrative example is presented. The results obtained from this example underscore a remarkable improvement in the overall transmission performance of the system. This enhancement is characterized by substantial gains in transmission efficiency and effective vibration control, highlighting the significance and practicality of the proposed approaches.