In this paper, the energy and exergy utilizations in the Chinese urban residential sector (CURS) are analyzed by considering the energy and exergy flows for the years between 2002 and 2011. The energy and exergy efficiencies of this sector are calculated to examine the potential for advancing the 'true' energy efficiency and determine the real energy losses. The results demonstrate large differences between the overall energy efficiencies (62.8-70.2%) and the exergy efficiencies (11.0-12.2%) for the years analyzed. The sizable gap between the energy and exergy efficiencies implies a high potential for energy savings in the CURS. Future energy saving strategies should pay more attention to the improvement in exergy efficiencies. Moreover, it is found that direct fuel use constituted the primary exergy losses of the CURS; coal-fired boiler heating systems cause approximately 35% of the total exergy losses. Gas stoves, cogeneration systems, coal stoves and gas water heaters constitute 15.3%, 15%, 5.5% and 4.9% of the total exergy losses, respectively. (C) 2014 Elsevier Ltd. All rights reserved.