The coaxial borehole heat exchanger (CBHE) can effectively develop deep geothermal resources with larger heat exchange area than traditional U-tube BHE. However, few studies focus on its parameters optimization and temperature field dynamic response. Hence, an unsteady-state heat transfer model is established for a deep CBHE. The finite difference method is adopted to solve the model, and the model is validated with experiment data. The effects of key factors on the CBHE performance are comprehensively analyzed. Simulation results depict that the outlet temperature decreases greatly at the initial stage, and then remains relatively stable. There is a critical value for flow rate to obtain higher thermal power with appropriate pressure drop. The insulated pipe can significantly reduce heat dissipation of working fluid in central pipe. There is an optimal insulation length in terms of heat insulation effect and costs. The thermal conductivity of cement sheath has remarkable influence on the thermal process and partial cementing with high thermal conductivity cement is favorable. The temperature field analysis shows that the impact scope is limited, and the temperature in the reservoir before the next heating period would almost recover its original condition, verifying the sustainability of CBHE system. (C) 2018 Published by Elsevier Ltd.