Abstract: The basic principles, intension, and extension of value engineering are introduced. Then, a life-cycle value management concept for resourcesaving naval vessels equipment is established by innovatively applying life cycle scientific management principle. With this concept, a life-cycle cost calculation model is presented by putting environmental cost into the equipment life-cycle cost. Based on reliability theory, an improved analytic hierarchy process (AHP) index weighting is proposed to analyze equipment performance indicator. The proposed performance evaluation methods are verified by fuzzy comprehensive evaluation and practical examples. Then, an optimization model for cost-effective is built. With quantitative and qualitative analysis combined, the value of ships and equipment is maximized. Thus, the proposed method provides a basis for life cycle management, analysis, and employment of resource-saving naval vessel equipment.