Exergy is based on the second law of thermodynamics and is the only rational basis for evaluating the system performance. The aim of this paper is to study in detail the irreversibilities in the steam-ejector refrigeration system. The influence of the cycle parameters is analysed on the basis of the first and second law and the results indicated the components with the greater irreversibility. A better quality of the ejector has more effect oil the system performance than the better quality of other components, because the ejector at first and the condenser at second have the greater exergy loss of the system. For the refrigeration system the maximum coefficient of performance varying between 0.4 to 0.6 and the second law efficiency remains close to 0.17 for generator pressure 6 bar, condenser temperature 44-50degreesC and evaporator temperature 4-8degreesC. Also the study showed that the second law analysis quantitatively visualizes losses within a system and gives clear trends for optimization. Copyright (C) 2005 John Wiley Sons, Ltd.