In this paper the use of probability theory in reliability based optimum design of reinforced gravity retaining wall is described. The formulation for computing system reliability index is presented. A parametric study is conducted using advanced first order second moment method (AFOSM) developed by Hasofer-Lind and Rackwitz-Fiessler (HL-RF) to asses the effect of uncertainties in design parameters on the probability of failure of reinforced gravity retaining wall. Totally 8 modes of failure are considered, viz overturning, sliding, eccentricity, bearing capacity failure, shear and moment failure in the toe slab and heel slab. The analysis is performed by treating back fill soil properties, foundation soil properties, geometric properties of wall, reinforcement properties and concrete properties as random variables. These results are used to investigate optimum wall proportions for different coefficients of variation of (5% and 10%) and targeting system reliability index (βt) in the range of 3 - 3.2. Copyright ASCE 2007.