Material selection is one of the critical steps in the design process. Conventionally material are selected through mapping of property requirement arise from the part or component service condition to the material property data table or monogram of the available material. Newly developed or synthesized materials are evaluated for their properties to add to data book that support the material selection. Recent development in the composite material manufacturing technology allows the engineer to manufacture materials with required properties. The choice in matrix, reinforcement pattern gives an opportunity to customize and optimize a material for the required properties as required in the design requirements. This research work aims to develop a material design optimization methodology for the development of customized material for structural components with their intended design requirements. The methodology uses meso-scale modelling of material to optimize the material design. Initially, the component service conditions are used to determine the material property requirements like young’s modulus, poison ratio, thermal expansion, shear stress, tensile and bending stress, wears, etc., Computer Aided Engineering (CAE) approach (FEA model of part or component) is used to optimize the material property like young modulus, Poisson ratio, toughness, fatigue etc, the proposed design methodology (the design tool) is used to make potentially critical decisions like matrix material, reinforcement type, reinforcement material, reinforcement particle/fibber size, reinforcement percentage, The applicability of material design optimization methodology is demonstrated with a case-study of material design for IC engine piston