The working principles and the basic features of a multi-functional domestic heat-pump (MDHP) system are introduced in this paper. Comparatively, the system can provide much better energy performance and higher equipment utilization throughout a year, causes less thermal pollution than the heat-pump water heater and the domestic air-conditioner. A prototype model of the MDHP system was assembled and its operation performance was tested. The results indicated that the new system can save energy through multi-duties, and can work stably under prolonged operation in regions having mild-winter temperatures. A numerical model of the system was also developed, and calibrated by the experimental data. The numerical model was found robust and accurate in predicting the equipment operation, and therefore can be applied to evaluate the system's performance under a spectrum of working environment and alternative equipment designs. (C) 2004 Elsevier Ltd. All rights reserved.