This paper presents an innovative concept of using air-cycle technology for the development of a microclimate cooling device for use by soldiers in the battlefield. The device is an integrated heat engine and heat pump which supplies air at a prescribed temperature and humidity for personal cooling of a soldier wearing protective ensembles, generates electrical energy to power communication equipment, and produces drinking water by condensing atmospheric moisture which may be very useful in desert warfare. It consists of a centrifugal compressor, two turbines or expanders, a combustion chamber, three heat exchangers, a water separator, and an electric generator. Atmospheric air is used as the working fluid in both the engine and cooling loops and diesel is used as the fuel for combustion. A detailed thermodynamic analysis and design optimization was performed It was found that the system efficiency increases with operating pressure ratio, attains a maximum, and decreases with further increase of pressure ratio. The system efficiency was found to be also dependent on the air-fuel ratio, and the maximum efficiency was found to occur at a specific air-fuel ratio for any given pressure ratio. The optimum operating condition determined from the thermodynamic analysis was used to outline a derailed design of the system.