This work introduces a strategy for the optimal design of distillation systems based on continuous optimization. The approach is similar to the one proposed earlier by [Lang, Y.-D., & Biegler, L. T. (2002). A distributed stream method for tray optimization. AIChE Journal, 48, 582], avoiding the need of solving extremely large and non-linear discrete optimization problems. When used with complex distillation units, it can identify interesting design configurations not considered by other continuous formulations, and also relieve some of the numerical difficulties associated with the use of distribution functions for the optimal location of feed and side-streams. The method considers a relaxation of the original problem, where the streams are initially split to several trays in the column, not necessarily adjacent. The optimal location of each stream is converged by constraining the optimization problem, using adjustable parameters that control the minimum amount of aggregation allowed. The methodology is illustrated with the application to several industrial case studies, including sets of distillation columns. Models up to 17,000 variables/equations were solved, revealing large economic benefits in the design of new units and optimization of sets of existing ones. © 2005 Published by Elsevier Ltd.