Abstract: Based on the inter-well connectivity and optimal control theory, this paper presented a new reservoir production optimization method.According to the existing inter-well connectivity model, the saturation tracing method was improved to obtain the connectivity model for predicting oil and water dynamics, and thus can more accurately calculate the fluid diversion caused by fluid upheaval, well shut-in, converted injection and other commonly-used measures.Through the automatic fitting inversion of dynamic history, the reservoir production optimization control model was established with the optimization algorithm for rapid solution.When maximizing economic benefits, the optimal injection and production scheme can be automatically obtained.The conceptual case demonstrated that the improved saturation tracking method is more accurate.The practical case also indicated that this method can automatically optimize the converted injection timing of oil well; meanwhile, the optimized injection and production scheme is able to effectively control water and increase oil yield, improve the economic development efficiency and provide a reference for on-site development scheme design.