Compliant mechanisms are jointless mechanical devices that take advantage of elastic deformation to achieve a force or motion transformation. A milestone toward systematic design of compliant mechanisms has been the development of topology optimization techniques. The next logical step is to incorporate size and shape optimization to identify the exact dimensional form of the mechanism. A new objective formulation based on maximizing the mechanical efficiency of a compliant mechanism is developed in order to perform the size and shape optimization. An advantage of this formulation is that precise control over the mechanism’s mechanical or geometric advantage can be enforced during optimization. Finite element beam models are used to perform dimensional synthesis of planar compliant mechanisms. This technique allows stress constraints to limit the maximum stress in the mechanism which improves the mechanism’s durability and flexibility. Resulting optimized mechanisms exhibit efficient mechanical transmission and meet kinematic and stress requirements. Several examples are given to demonstrate the effectiveness of the optimization procedure.