Miniature Neutron Source Reactor (MNSR) is currently the research reactor with the largest number of exports in China, which has only one fuel assembly with the diameter of 230 mm and the height of 248 mm. Within the limited space of the MNSR fuel assembly, 350 fuel elements are compactly installed and fixed on the bird cage. In the past practice of MNSR commissioning and assembly, the installation of fuel elements has been time-consuming and difficult to install in place, causing the staff to contact radioactive substances for a long time. To solve the above problems, based on keeping the physical design of fuel assembly unchanged, this article has conducted optimization research on the installation structure of MNSR fuel assembly. An installation structure design scheme of adding the “straight groove” to the lower end plug of the fuel element has been proposed, which can not only improve the accuracy and efficiency of installation but also reduce other problems caused by improper installation. By computational analysis and experimental simulation, the reliability and feasibility of the installation structure design scheme have been verified. The optimized design has been successfully applied in the installation and commissioning of MNSR fuel assembly in Ghana and Nigeria LEU conversion projects, significantly simplifying the operation process, remarkably reducing the working time, and effectively decreasing the radiation intensity of the staff. It provides an important reference for the optimization and installation of MNSR fuel assembly and helps promotion and application of MNSR globally.