The　increasingly　serious　traffic　congestion　makes　the　bus　system　more　and　more　inefficient.　It　is　recognized　all　over　the　world　that　designing　an　attractive　bus　transit　network　is　primordial　to　alleviate　traffic　congestion　and　reduce　pollution,　but　it　is　a　big　challenge　from　an　economic　and　technical　point　of　view.　In　the　literature,　dedicated　bus　lanes　are　generally　set　up　to　improve　the　efficiency　of　bus　transit　network　without　considering　bus　line　planning.　This　study　investigates　a　new　bi-objective　bus　line　planning　and　lane　reservation　integrated　optimization　problem　that　is　a　complex　combinatorial　optimization　problem.　The　objective　is　to　minimize　the　total　travel　time　of　passengers　and　the　lane　reservation　negative　impact,　simultaneously.　For　the　problem,　a　bi-objective　integer　linear　programming　model　is　first　formulated　and　the　problem　complexity　is　proved　to　be　NP-hard.　Then,　problem　properties　are　explored　to　reduce　search　space　for　optimal　solutions,　and　an　iterative　and　fuzzy　method　based　on　ε-constraint　is　proposed　to　yield　the　Pareto　frontier　and　suggest　a　preferred　solution　for　decision-makers.　Experimental　results　on　a　case　study　and　randomly　generated　instances　demonstrate　the　effectiveness　and　efficiency　of　the　proposed　model　and　method.　©　2020,　Springer　Science+Business　Media,　LLC,　part　of　Springer　Nature.