The paper discussed the property of transaction cost and its relationship with economic size and economic growth. By considering the abstractness and complexity of the traditional concept of transaction cost， the paper first puts forward a revised concept of transaction cost， then analyzes the properties of the transaction cost and explores its relationship with economic size and growth. We point out that transaction cost can be composed organically of transaction time， transaction labor and money cost， further， the paper sets up the hypothesis that only complicated transactions have the optimal transaction cost. It shows that reducing transaction cost will cause the economic size to expand and the change of the growth rate of transaction cost determines the change of economic growth rate. Finally the paper discusses the relationship between the optimal transaction cost and economic size， and we think that the optimal institutional arrangements should have the economy reach the point of optimal transaction cost so as to make the economic size to reach the optimal point.