—Increasing number of instances of privacy leakage in Cyber-Physical Systems (CPS) and the corresponding serious consequences have arisen great worries in our society. In most privacy preserving mechanisms proposed to protect the sensitive individual information, system performances are compromised at the same time. In this article, we consider the trade-off between individual privacy and system performance in CPS. After introducing the CPS architecture and the basic definition of differential privacy, we formulate the performance optimization problem subject to a given differential privacy requirement. For a simplified system, we derive the close-form optimal system performance under desired privacy requirement. Simulation results are provided to verify the proposed mechanism, which balances tradeoff between system performance and privacy. We also identify the future research topics on privacy preserving problem in CPS.