In this paper, a three-dimensional turbulent gas flow with solid particles was numerically simulated to optimize the performance of a cyclone preheater. The numerical approach for the flow development was based on unsteady simulations using the Reynolds Stress Model (RSM). The Discrete Phase Model (DPM) was used for the dispersion of particles due to turbulence in the fluid phase. The size of raw material solid particles ranged from 1 mu m to 30 mu m and the inlet gas velocity ranged from 10 m/s to 20 m/s were considered for parametric study. The main objective of this study consists of the performance evaluation of the cyclone pre-heater in terms of collection efficiency, pressure drop across the cyclone, heat transfer rate. The results indicate that the increase of particle size leads to increase collection efficiency of the particles up to 99.89% and temperature difference of about 212 K with the slight variation of pressure drop. The heat transfer rate decreases with increase in inlet air velocity due to less particles residence time inside the cyclone pre-heater. For a given cyclone design and working conditions, the maximum heat transfer was 87 W for 30 mu m particle size with hot air velocity of 10 m/s.