Abstract: With regard to the over-narrow margin of formation pressure and fracture pressure in the deepwater drilling, Conoco Company and Hydril Company have jointly researched and developed the lift drilling technology of deepwater dual gradient subsea drilling fluid (Subsea Mudlift Drilling, hereinafter referred to as SMD). Based on the process principle of SMD drilling system and basic knowledge of drilling hydraulics, a hydraulic parameter calculation model suitable for the SMD drilling system has been established, and the optimization design of hydraulic parameter of SMD drilling system is done by targeting the maximum drill bit hydraulic power. The actual drilling data in the published literature overseas is verified. In the hydraulic parameter calculation model, the error between manifold pressure loss and actual pressure loss is within 6%, and the total error of circulating pressure loss is 4.3%. According to the calculation results, the hydraulic parameter calculation model has relatively high precision. The optimization calculation method of hydraulic parameter has important guiding significances for the deepwater drilling in China.