The coefficient of performance (COP) of air-source heat pumps (ASHP) decreases toward low outdoor temperatures. This paper presents an auto-cascade heat pump system (ACHPS) with the objective to improve the heating performance of ASHP in cold climate. The auto-cascade process is achieved based on the separation of binary zeotropic refrigerant mixture consisting of pure refrigerants with different boiling points. Fluid selection for the ACHPS is carried out to validate the feasibility for potential application. Based on the performance analysis on COP, 15 qualified binary mixtures are obtained. R143a/R600 (0.8/0.2) tops the potential working fluid with a COP of 2.15. The effects of system parameters, such as circulation composition, heat transfer fluid (HTF) temperature glide and temperatures of heat source and sink on COP and exergy efficiency of ACHPS are thereafter investigated. The simulation results show that there exist a maximum COP of 2.15 and a maximum of exergy efficiency of 37.2% at the R143a mass fraction of 0.8 when the ambient temperature and heating temperature are -10 degrees C and 50 degrees C, respectively. Finally, by comparison with the single-stage heat pump operating with commercially available refrigerants, the proposed ACHPS shows an advantage of compressor isentropic efficiency. The compression isentropic efficiency of ACHPS could be increased by 25.5% compared to the single stage cycle working with R407c when the ambient temperature is -10 degrees C. (C) 2014 Elsevier B.V. All rights reserved.