The effects of moisture on the performance of thermoelectric air conditioning systems and heat pumps equipped with a heat exchanger were studied. Coefficients of performance and fluid temperature variations were calculated for heat capacity ratios from 1 to 10 and relative humidities ranging from 0 to 100 percent at the cold fluid inlet. Only the energy effects of the water condensation are considered as it is assumed that the heat transfer coefficients are those of a dry heat exchanger. It was found that different flow arrangements and the energy associated with condensation on the cold fluid side have no strong effects on the variation of the hot fluid temperature. The coefficient of performance decreases and the cold fluid exit temperature increases when condensation occurs. When the moisture content at the cold fluid inlet increases, most of the cases studied show a decrease in the difference between the optimum and uniform current results. The difference among different flow arrangements also becomes smaller as more water vapor condenses in the cold flow.