We describe a new air-conditioning and heat-pump system, which may be used to separate a refrigerant mixture efficiently and adjust the composition in the system with cooling-or heating-load changes. A dynamic model has been developed to analyze the transient behavior of the capacity-control system. An air conditioner equipped with a small distillation circuit has been tested. Increases in the SEERs (seasonal energy efficiency ratios) for the new composition-controlled system are 28.3 and 17.7% and capacity changes 57.3-91.8% and 71.5-101%, respectively, for R22/142b and R23/124.