A size and shape optimization routine is developed for a diameter multifunctional instrument for minimally invasive surgery. The instrument is a compliant mechanism capable of both grasping and cutting. Multifunctional instruments are expected to be beneficial in the operating room because of their ability to perform multiple surgical tasks, thereby decreasing the total number of instrument exchanges in a single procedure. With fewer instrument exchanges, the risk of inadvertent tissue trauma as well as overall surgical time and costs are reduced. The focus of this paper is to investigate the performance effects of allowing the cross-sectional area along the length of the device to vary. This investigation is accomplished by defining various cross-sectional segments in terms of parametric variables and optimizing the dimensions of the instrument to provide a sufficient opening of the forceps jaws while maintaining adequate cutting and grasping forces. Two optimization problems are considered. First, all parametric segments are set equal to one another to achieve size optimization. Second, each segment is allowed to vary independently, thereby achieving shape optimization. Large deformation finite element analysis and optimization are conducted using ANSYS®. Finally, prototypes are fabricated using wire EMD and experiments are conducted to evaluate the instrument performance. As a result of allowing the cross-sectional area to vary, i.e., conducting shape optimization, the forceps and scissors blocked forces increased by as much as 83.2% and 87%, respectively. During prototype evaluations, it is found that the finite element analysis predictions were within 10% of the measured tool performance. Therefore, for this application, it is concluded that performing shape optimization does significantly influence the performance of the instrument.