Optimization design of heat exchangers based on entropy generation analysis is critical to improve the efficiency of CO2 refrigeration systems. However, most of the previous studies in this field were focused on individual components that are isolated from the entire system. Little has been done on the component analysis within the framework of entire refrigeration cycle. To probe this important issue, the entropy generation analysis is performed in this study on the fan-supplied gas cooler within a two-stage CO2 refrigeration system. The optimum circuit length is found by investigating the influences of geometrical parameters such as tube spacing, fin density and tube diameter on the heat transfer rate and entropy generation number of the gas cooler. The designed fan-coil is then put into the frame of the two-stage refrigeration cycle and its energy performance and exergy performance are both evaluated on the system level. The results show that the analysis with isolated gas cooler can lead to overestimated or unrealistic predictions on the heat transfer performance compared to the analysis within the framework of entire cycle. (C) 2012 Elsevier Ltd. All rights reserved.