Optimized design of an air source heat pump system for the improved energy efficiency was presented in this paper. Plate heat exchanger for heat recovery and auxiliary finned heat exchanger were added to the system, which would provide cooling in summer, heating in winter and domestic hot water all year around. Speed-controlled pump and fan were used to improve the system performance and stability under different weather conditions. An experimental study on the energy performance was carried out. The results indicated that the COP was 3.3.