In recent years, biomass gasification has emerged as a viable option for decentralized power generation, especially in developing countries. Another potential use of producer gas from biomass gasification is in terms of feedstock for Fischer-Tropsch (Fr) synthesis - a process for manufacture of synthetic gasoline and diesel. This paper reports optimization of biomass gasification process for these two applications. Using the non-stoichometric equilibrium model (SOLGASMIX), we have assessed the outcome of gasification process for different combinations of operating conditions. Four key parameters have been used for optimization, viz. biomass type (saw dust, rice husk, bamboo dust), air or equivalence ratio (AR = 0, 0.2, 0.4, 0.6, 0.8 and 1), temperature of gasification (T = 400. 500, 600, 700, 800, 900 and 1000 degrees C), and gasification medium (air, air-steam 10% mole/mole mixture, air steam 30% mole/mole mixture). Performance of the gasification process has been assessed with four measures, viz, molar content of H-2 and CO in the producer gas, H-2/CO molar ratio, LHV of producer gas and overall efficiency of gasifier. The optimum sets of operating conditions for gasifier for FT synthesis are: AR = 0.2-0.4, Temp = 800-1000 degrees C, and gasification medium as air. The optimum sets of operating conditions for decentralized power generation are: AR = 0.3-0.4, Temp = 700-800 degrees C with gasification medium being air. The thermodynamic model and methodology presented in this work also presents a general framework, which could be extended for optimization of biomass gasification for any other application. (C) 2010 Elsevier Ltd. All rights reserved.