Since the previous cut-and-try design algorithm requires much cost and time, the automated design technique with the CFD and optimum design algorithm has recently been concerned. In this work, the Navier-Stokes equation was solved to gain more detailed viscous flow information of cascade with rotor-stator interactions. The H-grid embedded by O-grid was generated to obtain more accurate solution by eliminating the branch cut of H-grid near airfoil surface. To handle the relative motion of the rotor to the stationary stator, the sliding multiblock method was applied and the cubic-spline interpolation was used on the block interface boundary. To validate present procedure, the time-averaged aerodynamic loads were compared with experimeatal data. A good agreement was obtained. The Modified Method of Feasible Direction (MMFD) was used to carry out the sensitivity analysis of the change of aerodynamic performance by the changes of the cascade geometry. The present optimization of the cascade gave a dramatic reduction of the drag while the lift maintains at the value within the user-specified tolerance.