This paper presents a model for estimating the total cost of shell-and-tube heat exchangers (HEs) with condensation in tubes or in the shell, as well as a designing strategy for minimizing this cost. The optimization process is based on a genetic algorithm. The global cost includes the energy cost (i.e. pumping power) and the initial purchase cost of the exchanger. The choice of the best exchanger is based on its annualized total cost. Eleven design variables are optimized. Ten are associated with the HE geometry: tube pitch, tube layout patterns, baffle spacing at the center, baffle spacing at the inlet and outlet, baffle cut, tube-to-baffle diametrical clearance, shell-to-baffle diametrical clearance, tube bundle outer diameter shell diameter, and tube outer diameter. The last design variable indicates whether the condensing fluid should flow in the tubes or in the shell. Two case studies are presented and the results obtained show that the procedure can rapidly identify the best design for a given heat transfer process between two fluids, one of which is condensing. Copyright (C) 2008 John Wiley & Sons, Ltd.