Abstract A new indicator to represent a maximum capacity expansion rate of distillation processes is presented in this article. A hydraulics-based heuristic strategy consisting of three levels is proposed to address the capacity expansion retrofit redesign of distillation systems. The first level is to evaluate an existing process to get the indicator which reflects quantitatively the capacity expansion rate, where a fractional utilization of area (FUA) method is also employed to screen the process bottlenecks. In the second level, the indicator is used to find the available debottlenecking measures from a measure library which is based on heuristics. In the last level, a new economy indicator called specific annual cost (SAC) is used to sort the available debottlenecking measures, and the corresponding process flowsheets and operation parameters are determined. An industrial capacity expansion retrofit for a light-ends separation plant is conducted so as to evaluate the performance of the proposed indicators and strategy in screening the available retrofit alternatives. Modifications on feeding location, operating pressure, number of theoretical stages, and feeding thermal condition, etc. are proposed to remove the bottlenecks. The maximum capacity expansion rate of the plant is about 40.0%, and the near-optimum retrofit options for different capacity expansion rates such as 20%, 25%, 30%, 35% and 40% are also presented. The results show that the proposed capacity expansion strategy is capable to resolve the issues associated with the retrofit redesign in a systematic and relatively simple way.