A self-consistent procedure has been established for economic design optimization of the lithium-lead (LiPb) blanket for the MARS tandem mirror reactor. The procedure is necessarily iterative and enables progress in blanket design to be assessed in terms of the minimization of an economic figure of merit F for the complete reactor system. Typical economic design questions regarding blanket and central cell parameters such as tritium breeding ratio, neutron energy multiplication factor, thermal cycle efficiency, blanket radial thickness, magnet radii, etc., can then be addressed in terms of their influence on overall system costs. This procedure is not necessarily specific to MARS and has general applicability to fusion reactor blanket design optimization. Application of the procedure resulted in a blanket with small (∼ 38 cm) radial thickness, highly enriched (90%) lithium, adequate tritium breeding ratio (1.14) and a neutron energy multiplication and thermal efficiency approaching those for blankets of considerably larger radial dimensions.