This paper proposes a new perspective of using graph transformation systems as a way of organizing and solving engineering design problems. Using this novel technique the synthesis of optimal solutions in the form of graph topologies for design problems is made possible. Though the concept of graph grammars has existed for several decades in computer science literature, researchers in the field of design have now begun to realize the merit of using them to harness both the knowledge and heuristics of a particular problem domain. This paper examines the fundamental challenges in applying graph transformations in a design context. The paper also presents the first topology optimization method that has been developed specifically for domains representable by a graph grammar schema. This novel approach could also be used in several problems such as network problems (especially in determining the placement of hubs), electric circuit design, neural networks, sheet metal, and product architecture. The abstraction afforded by graphs also enables us to tackle multi-disciplinary problems found throughout engineering design. A few engineering examples are shown in this paper in order to illustrate the power of the approach in automating the design process.