Energy conservation is now faced with the challenge of applying the latest technology for facilities and improvements which can be justified on its own merits. Air conditioning units are designed to remove heat from interior spaces and reject it to the ambient air. While this heat is of low grade variety, it still represents wasted energy. The most obvious form of heat recovery is for heating water. The feasibility of using a heat pipe heat exchanger for recovering heat from a 3 ton A/C unit is studied. In this research, the characteristic design and heat transfer limitations of a single heat pipe for four types of working fluids have been investigated. A homogenous wick was selected by calculating the capillary pressure desired to transport the working fluid from condenser to evaporator. After calculating the heat flux, a heat pipe heat exchanger was designed. The HPHE was then constructed and tested under the operating conditions. The effectiveness of HPHE under the operating conditions was found to be satisfactory.