A method and a system for analyzing one or more test case trees for automatically generating an optimized test tree model are disclosed. The one or more test case trees are received and analyzed to identify a source tree and a target tree. Further, levels of each node of the source tree and the target tree are analyzed to identify a source node and a target node. The source node and the target node are compared to obtain a match. The source node is merged with the target node if the match is obtained. Else, a next source node and a next target node are identified based on one or more parameters. The identified nodes are subsequently compared and merged. The merged nodes are further optimized to generate the optimized tree model.