In this study, a threshold policy is considered for the M/M/2 queueing system with server vacations. The probability generating function for the number of customers present in the system is derived using an embedded Markov chain approach. Then, assuming a linear cost structure, an efficient procedure to find an optimal threshold policy is presented. The Laplace-Stieltjes transofrm for th waiting time of an arbitrary customer under a "FIFO" discipline is also derived.o derived.