The main objective of the current paper is to determine fatigue critical details of wave-energy converters (WECs) and to evaluate their reliability. For this purpose, a new model of a water-hydraulic drive WEC is designed based on the IPS (company Interproject Service) buoy working principle, and the hydrodynamic frequency domain analysis method is carried out accordingly. A reliability assessment method, which combines the stress-number (SN) curves approach and linear damage cumulative theory, has been developed specifically for the proposed WEC. In order to obtain the stochastic wave load spectrum, 22 years of wave data of the intended deployment site (South China Sea), covering the span of 1988–2009, were analyzed, discussed and processed. A finite element analysis model is also established to calculate the maximum Von Mises stress of the fatigue critical component. The reliability indices and configuration parameters of the water hydraulic-drive WEC are obtained by applying first order reliability method, considering the uncertainty of the model parameters and the fatigue limit state. Optimization of configuration parameters is also developed based on the reliability method for the sake of approaching the expected service life. The results show that the fatigue life of the water turbine can reach the design service life of 20 years as the configuration parameters meet the specific condition. The cumulative reliability index and annual reliability index are recommended as 2.1 and 3.5, respectively.