In view of the Steinmetz circuit usually used for balancing the single-phase load of the AC electrified railway that requires very large compensation capacity， a rational optimum capacity compensating method is proposed using the optimization technique with minimal total capacity of the three-phase compensation device as the objective. First， the relationship among the phase-to-phase compensation power， the current unbalance degree and system power factor is deduced. When the system power factor and the current unbalance degree are within the allowable ranges respectively， a mathematical model for the phase-to-phase compensation capacity of balancing the single-phase load is developed. By solving the mathematical problem with the optimum method， the analytical results of the compensation capacity are obtained. Comparisons between the optimal results and those of the original Steinmetz circuit are made by MATLAB simulations， which demonstrate the obvious advantages of the optimum design. A case study shows that the system can be balanced by the optimal capacity with acceptable performance and less cost.