The spatial resolution, detection rate, accuracy and reliability of a particle image velocimeter depend critically upon careful selection of a number of parameters of the PIV system and the fluid. An analytical model has been developed to analyze the effects of variation of experimental parameters which optimize the system. A set of six nondimensional parameters which are most significant in optimizing the PIV autocorrelation algorithm are derived. They are the data validation criterion, the particle image density, the relative in-plane image displacement, the relative out-of-plane displacement, a velocity gradient parameter and the ratio of the mean image diameter to the interrogation spot diameter. A comparison is made with the method of analysis by Young's fringes to show this set of parameters is most significant there and the analysis is valid for both methods of PIV system interrogation. A study of a range of specific velocity fields has been undertaken to determine the influence of these parameters in each case and recommendations are made for interrogation of these velocity fields. The presence of velocity gradients in the velocity field has been examined for the cases of pure shear and solid body rotation. Corrections for the statistical bias are developed, with recommendations for minimizing bias effects and loss of signal strength.