In order to further improve the transmission efficiency of the cycloidal pinwheel reducer, this study conducted in-depth research on the influence of the reducer transmission efficiency. It proposed a calculation model for the transmission efficiency of the cycloidal pinwheel reducer that takes into account changes in design parameters and working condition parameters and optimized the parameters. Firstly, considering the friction force and meshing backlash, the study established a multi-tooth load-bearing contact analysis model of the cycloid pinwheel transmission mechanism, and calculate the meshing force and load distribution pattern of the cycloid pinwheel gear. Then, considering the engagement loss, output loss, bearing loss, lubrication loss and sealing loss, this paper proposed a calculation model for the transmission efficiency of the cycloidal pinwheel reducer, and analyzed the influence of the design parameters and working condition parameters on the transmission efficiency of the cycloidal pinwheel reducer. Research shows that, taking frictional stress into account, rotation speed, load, pin tooth pin radius, pin tooth distribution circle radius, eccentricity, and pin tooth sleeve radius are the main parameters that affect transmission efficiency, followed by the number of pin teeth, pin distribution circle radius, pin radius and cycloid tooth width. Finally, the optimal parameter solution was obtained through a multi-objective optimization analysis of the design parameters with gear strength, gear width, tooth profile shape, inter-tooth clearance and load-bearing capacity as the parameter optimization range, and transmission efficiency and volume as the goals. And then a smaller volume and more efficient cycloidal pinwheel reducer was obtained.