Abstract: In this paper, we will discuss the problem of optimal model order reduction of bilinear control systems with respect to the generalization of the well-known 2-norm for linear systems. We revisit existing first order necessary conditions for 2-optimality based on the solutions of generalized Lyapunov equations arising in bilinear system theory and present an iterative algorithm which, upon convergence, will yield a reduced system fulfilling these conditions. While this approach relies on the solution of certain generalized Sylvester equations, we will establish a connection to another method based on generalized rational interpolation. This will lead to another way of computing the 2-norm of a bilinear system and will extend the pole-residue optimality conditions for linear systems, also allowing for an adaption of the successful iterative rational Krylov algorithm (IRKA) to bilinear systems. By means of several numerical examples, we will then demonstrate that the new techniques outperform the method of balanced truncation for bilinear systems with regard to the relative 2-error.