Exergy method of optimization for the geometrical parameters of an air conditioning precooling air reheater with turbulent flow is developed in this paper. The method is based on exergy, economic analysis and optimization theory. As there are humid air streams involved in the heat transfer process, then there are irreversibilities or exergy destruction, which is due to pressure losses, temperature difference and specific humidity gradient. These principle components of total irreversibility are not independent and there is a trade-off between them. Therefore, the purpose of this research paper is to study the effect of the geometry and the specific humidity of the two streams on the irreversibilities of a crossflow precooling air reheater dehumidifier. Also, the optimum balance between the three components of irreversibility is deter-mined thereby giving the optimum solution for heat exchanger area. The total cost function is expressed on an annualized basis of the sum of the precooler capital cost and the running cost attributable to the precooler irreversibility. This total cost function is optimized in this paper according to the optimum heat transfer area and the total irreversibilities. Two optimum heat transfer areas were found for minimum total irreversibility and minimum total annual cost for a specific example. Finally, the relations between the typical operational variables such as heat transfer area, Reynolds numbers and the total annual cost for the precooler is developed and presented in graphs, which allow the calculation of the optimal heat transfer area, which gives the optimum irreversibility and minimum total annual cost. Copyright (c) 2005 John Wiley & Sons, Ltd.