In this paper we study a usage based lease contract for remanufactured equipment as an implementation of product service system. Under this lease contract, the equipment is leased for a period of $$ \Gamma $$ with a maximum usage, U. If the usage of the equipment exceeds U at time $$ \Gamma $$, then lessee will be charged some additional cost. Otherwise there will be no additional cost. The price of the lease contract for the remanufactured equipment is much cheaper than that of a new one. As a result, the lease contract for the remanufactured equipment would be a more attractive option to the lessee. The decision problem for the lessee is to select the best option suitable to its requirement, and the decision problem for the lessor is find the optimal maintenance policy and the price for each length of periods offered. We provide numerical examples for illustrating the optimal decisions for the lessee, and the lessor, which maximizes the expected profit for each party.