In this study, a methodology for optimal layout design of pressure cells for concrete faced rockfill dams is developed. A representative dimensionless stress distribution model was formed for obtaining the magnitudes and location of different stress zones as a function of dam height. This information enabled development of a procedure for proper location and the number of pressure cells throughout the dam body. A vertical placement algorithm based on error minimization was first developed, which is followed by an approach to find the number and location of pressure cells on a particular elevation of the dam body. The effects of face slab cracking and earthquake are interpreted. Furthermore, the performance of the proposed model was also tested when instruments are installed to different elevations in the dam body than those recommended by the model developed. The proposed optimization scheme provides a basis for economical layout design of pressure cells with sufficient information allowing realistic assessment of the structural behavior. The application of the proposed model is illustrated for some existing dams. It is observed that this algorithm gives satisfactory results.