Urban heating in northern China accounts for 40% of total building energy usage. In central heating systems, heat is often transferred from heat source to users by the heat network where several heat exchangers are installed at heat source, substations and terminals respectively. For given overall heating capacity and heat source temperature, increasing the terminal fluid temperature is an effective way to improve the thermal performance of such cascade heat exchange network for energy saving. In this paper, the mathematical optimization model of the cascade heat exchange network with three-stage heat exchangers in series is established. Aim at maximizing the cold fluid temperature for given hot fluid temperature and overall heating capacity, the optimal heat exchange area distribution and the medium fluids’ flow rates are determined through inverse problem and variation method. The preliminary results show that the heat exchange areas should be distributed equally for each heat exchanger. It also indicates that in order to improve the thermal performance of the whole system, more heat exchange areas should be allocated to the heat exchanger where flow rate difference between two fluids is relatively small. This work is important for guiding the optimization design of practical cascade heating systems. Urban central heating in northern China accounts for 40% of total building energy usage. overall heating capacity and heat source temperature, increasing the terminal fluid temperature is an effective way to improve the thermal performance of such cascade heat exchange network for energy saving. In this paper, the mathematical optimization model of the cascade heat exchange network with three-stage heat exchangers in series is established. Aim at maximizing the cold fluid temperature for given hot fluid temperature and overall heating capacity, the optimal heat exchange area distribution and the medium fluids’ flow rates are determined through inverse problem and variation method. The preliminary results show that the heat exchange areas should be distributed equally for each heat exchan ger. It also indicates that in order to improve the thermal performance of the whole system, more heat exchange areas should be allocated to the heat exchanger where flow rate difference between two fluids is relatively small. practical cascade heating systems.