We present the results from the 3-D numerical simulations on the optimization of the fan-cooling system in a two-wheeler 4-stroke single cylinder engine. Objective was to optimize the flow rate and distribution of flow over the engine surfaces to keep the maximum temperature of engine oil and engine surfaces well within the lubrication and material limit respectively at the expense of minimum increase in fan power. This work aimed at reducing the engine oil temperature by 20°C. Combined flow and heat transfer analysis (Conjugate analysis) was conducted with the engine head and block modeled as solid medium and fan cooling system modeled as fluid medium. Reynolds-Averaged-Navier-Stokes turbulence (RANS) equations along with energy equation were solved to get the flow field and temperature distributions inside the cooling system and on the engine surfaces respectively. Moving Reference Frame approach was used for simulating the rotation of fan. Cowl geometry was modified for providing better guidance to flow over engine surfaces and to get maximum utilization of cooling capacity of flowing air. Fan size and blade shape were altered to increase the flow rate and reduce fan power consumption. Flow parameters in the cooling path and temperatures at engine surfaces were validated against the experimentally measured values on test rig. The final design gave a 24°C reduction in oil temperature and 3.1% reduction in fan power, while maintaining same flow rate.