The city waste production forecasting is one of the important prerequisites to develop disposal measures for public services. The city waste systematic management started relatively late in china, the influence factors of waste output are relative larger, and the relationships among the factors are sometimes difficult to accurately described, moreover, the forecasting data sample is seldom. So the errors of the prediction were over large always. Based on the analysis of the traditional prediction GM (1,1) model, the application of background value optimizing GM(1,1)model to city waste production forecasting is proposed in this paper. Comparative analysis the waste production forecasting results of the traditional model and the optimization model in Shanghai between the year 2004 to 2009, it got verified the feasibility and effectiveness of the optimal of the background value in GM (1,1) model. Finally, the optimized GM (1,1) model is used to forecast the future waste production in Shanghai.