Effective reuse of waste heat is one of the most important research issues in the industrial field because large amount of the energy is exhausted as a form of mid-low temperature flue gas. Usually condensing heat recovery system which extracts both sensible and latent heat of the exhaust gas is used for this purpose. With heat pump, the recovered heat can be recycled to the high temperature industrial process because it can transfer heat energy of low temperature to high temperature. A 70 kW grade heat pump system with flue gas heat recovery was installed in KIER (Korea Institute of Energy Research). The system was connected to an absorption chiller-heater and used to heat return water to the absorption chiller-heater. The heat recovery system was used to transfer heat of the by-passed flue gas of the absorption chiller-heater to the low temperature side of the heat pump. Field study was performed during the winter season of 2012 and the operating characteristics of the heat pump system were analyzed. Based on the results of the field study, optimum operating temperature range was suggested, which was 51℃ of return water and 31℃ of source water. Finally the economic analysis was performed and about 50% of cost saving was expected.