This paper presents a practical and useful engineering method for the design and control of optimum efficiency water cooled chiller plants. The proposed design approach uses the chiller load normalized efficiency characteristics of chillers, cooling towers, and condenser water pumps to optimize design and control based on the concept of derivative efficiency, a term which is applied to the operation of chillers, condenser water pumps and cooling tower fans. One of the significant recommendations in the paper is that after the chiller plant is fully designed the chiller plant sequence of control can be based primarily on just two parameters, chiller lift and chiller load.