A co-axis and all-reflective afocal ZH optical system and its alignment method were introduced. The ZH optical system consists of a first paraboloid, a mirror with two operational faces and a 45° angle and a second paraboloid. The two paraboloids were installed from every end of the mirror,and the mirror with two operational faces was mounted easily. The tolerance and assembly of the ZH optical system were computed and analyzed, the effect of the position misadjustment of the element on the system was discussed, and the error analysis results were given. As there is an offset distance between the incidence optical axis and the shoot optical axis when the light propagates through the ZH system, a precision assembly method was proposed to ensure the parallel of the incidence optical axis and the shoot optical axis. In experiments, a visible collimator tube was used to align the ZH optical system, and the horizontal and vertical parallel offset lenses were taken to compensate the offsets. Moreover, a micro-displacement measuring module and a micrometer eyepiece were used to measure the adjusting size of the system. By the proposed method, the ZH system completes the co-axis of the incidence optical axis and the shoot optical axis. The parallel offset lenses were taken out after ZH optical was assembled, and the system can realize the space parallel of the optical axes.