This paper presents a methodology for the design evolution of engineering systems, with a mechatronic emphasis. The developed approach specifically integrates machine health monitoring and an expert system and carries out the design evolution of a multidomain dynamic system using bond graph modeling and genetic programming. The evolution of a bond graph model of a mechatronic system through genetic programming enables the exploration of the design space, thereby generating a global optimum design solution in an automated manner. Domain knowledge and expertise are used to control the design exploration and to restrict it only to a meaningful design space. As an illustrative example, the developed methodology is applied to redesign the electrohydraulic manipulator of an existing industrial fish processing machine.