To solve assembly optimal tolerance allocation for composite dimensional and geometric tolerances on the basis of Jacobian-torsor tolerance model, a nonlinear optimal tolerance allocation model was established aiming to minimize the total manufacturing cost. First, the accumulated assembly error was calculated based on spatial dimension chains propagation in tolerance model. The assembly functional requirement was regarded as constraints of optimization model. Optimal dimensional and geometric tolerances could be obtained by genetic algorithm. A gear pump assembly was used as a typical example for testing the proposed method. The obtained results were guaranteed to minimize processing costs while satisfying the product assembly quality at the same time.