A theoretical analysis of a two-stage transcritical CO2 cooling cycle is presented. The effect of a two-stage cycle with intercooling process on the system coefficient of cooling performance is presented for various gas cooler pressures. However, the performance comparison between one-stage and two-stage cycles is presented for same operating conditions. Gas cooler pressure, compressor isentropic efficiency, gas cooler efficiency, intercooling quantity and refrigerant outlet temperature from the gas cooler are used as variable parameters in the analysis. It is concluded that the performance of the two-stage transcritical CO2 Cycle is approximately 30% higher than that of the one-stage transcritical CO2 cycle. Hence, the two-stage compression and intercooling processes can be assumed as valuable applications to improve the transcritical CO2 cycle performance. Copyright (c) 2008 John Wiley & Sons, Ltd.