Target cascading is a key challenge in the early product development stages of large complex artifacts: How to propagate the desirable top level design specifications (or targets) to appropriate specifications for the various subsystems and components in a consistent and efficient manner. Consistency means that all parts of the designed system should end up working well together, while efficiency means that the process itself should avoid iterations at later stages, which are costly in time and resources. In the present article target cascading is formalized in a process modeled as a multilevel optimal design problem. Design targets are cascaded down to lower levels using partitioning of the original problem into a hierarchical set of sub-problems. For each design problem at a given level, an optimization problem is formulated to minimize deviations from the propagated targets and thus achieve intersystem compatibility. A coordination strategy links all subproblem decisions so that the overall system performance targets are met. The process is illustrated with an explicit analytical problem and a simple chassis design model that demonstrates how the process can be applied in practice.