Thermo-compressors are widely used in industries for steam compression through a thermal process. Common methods of thermo-compressors analysis are based on the hypothesis of considering steam as a perfect gas. In this study, the deviation of thermo-compressor performance at wet steam conditions from the performance under the ideal gas assumption has been investigated. Firstly, a numerical method has been implemented to evaluate the formation of droplets due to condensation in a convergent-divergent nozzle. The results have been validated using existing experimental data for single nozzles. Afterwards, the verified numerical scheme has been applied to internal flow of the thermo-compressor. The formation of droplets due to condensation effect and the resulting supersonic core in the thermo-compressor have been deeply investigated. Finally, the effect of wet steam assumption on the performance characteristics of thermo-compressors has been presented. (C) 2012 Elsevier Ltd. All rights reserved.