In Canada, the overall energy usage in residences for space and water heating has increased year over year despite the introduction of higher efficiency furnaces and water heaters, creating an opportunity for alternative space and water heating systems. A tankless water heater, coupled with a hydronic air handling unit, functions as a novel system known as a combination system that provides water and space heating as a unified system. Previous studies have quantified combo systemperformance for space heating only; but currently, no studies have quantified simultaneous space and water heating operation. An experimental method was developed in order to quantify the effect of the outlet water temperature from a tankless water heater and domestic hot water draw rate on the performance of a combo system. With the experimental assembly, it was found for outlet water temperature settings between 38 degrees C and 60 degrees C, the thermal efficiency was between 88% and 94% for water draw of 7.6 L/min and between 74% and 94% for water draw of 15.1 L/min. An exergy analysis of the air heater unit was performed and the results are presented. The results suggest that a tankless water heater combination system can be an efficient configuration for residential space and water heating though there are challenges in managing the large ldynamic range such combo systems face. (C) 2016 Elsevier B.V. All rights reserved.