Reverse electrodialysis (RED) heat engine is a novel technology to convert low grade heat into electricity. Through combining the multi-effect distillation (MED) with RED, the so-called MED-RED heat engine has received increasing attention over the recent years. In this paper, a comprehensive theoretical exergy analysis for the MED-RED heat engine has been carried out based on a validated mathematical model. And the influences of relevant operation and design parameters on the exergetic performance of the heat engine were investigated. The results showed that the preheater, condenser and RED unit were main sources of exergy destruction in the heat engine. The total relative exergy destruction of these three components was 59.8% and the exergetic efficiency of the heat engine reached 4.7% under the design condition. Moreover, elevating the temperature of hot water had a negative effect on enhancing the exergetic performance of the heat engine. On the contrary, increasing the concentration of initial brackish solution or the number of effect evaporators in the MED was helpful for improving the exergetic performance of the heat engine. Finally, discussion in terms of improving the exergetic performance of the heat engine was carried out and relevant approaches were presented.