In this research technical, economical, and environmental feasibility study of applying internal combustion (IC) engines for supplying the required electricity, domestic hot water (DHW), heating and cooling energy loads in a typical 10-floor 40-units residential building located in Tehran city has been carried out using exergy analysis. The building has the area of 200 m(2) at each unit. The peak demands of electricity, DHW, heating and cooling loads of the building are 32.96 kW, 0.926 kW, 1590 kW and 2028 kW, respectively. The results show that considering the geographical situation and climatic conditions of Tehran, five units of G3306B IC engine and combined heat and power (CHP) internal combustion engine can meet the required energy of this building. Exergy and economic analysis of the system has been assessed with consideration of the external costs of the pollutants including CO2, CO, and NO in the flue gas of the internal combustion engine. The annual average electricity cost of this system to be equal to 0.05 (US$/kWh) and the annual entropy generation of this system to be equal to 29,903 (GJ/year). (C) 2012 Elsevier B.V. All rights reserved.