In this study, a space heating used transcritical CO2 heat pump system with an R134a subcooling device was proposed and the medium temperature was researched theoretically and experimentally. To validating the existence of the optimal medium temperature, the system performances were studied: the system power dissipation declined, while the heating capacity increased first and then decreased with the augment in medium temperature. To search the reason of the optimal medium temperature, the system parameters of both the refrigerant side and water side were also discussed in detail: the varied trend of the parameters were sophisticated with the change in medium temperature. Additionally, a correlation was established to predict the optimal value of the medium temperature under various conditions with the ambient temperature, water return temperature and water delivery temperature as the independent variables.