This paper presents the optimization of an air conditioning system, in which the heat from the hot stream is transported to do work first, and then the work is used to pump heat from the environment into the room. It is shown that the system can deliver more heat into the room than the direct heating by the hot stream. A functional is set up to optimize the distribution of the total thermal conductance for the system, and the numerical results show that the functional is effective. The system is also discussed with the concepts of entropy and entransy. It is found that the minimum values of the entropy generation rate, entropy generation number, revised entropy generation number, entransy loss and entransy loss coefficient all correspond to the maximum heat flow rate into the room with prescribed heat flow rate from the hot stream, but the values of the parameters all increase with increasing heat flow rate from the hot stream and that into the room. (C) 2013 Elsevier B.V. All rights reserved.