This work analyzes the tradeoff between steady-state economics and dynamic controllability for heat-integrated recycle plants. The process consists of one reactor, two distillation columns, and two recycle streams first studied by Tyreus and Luyben (Ind. Eng. Chem. Res. 32 (1993) 1154) and further explored by Cheng and Yu (A.I.Ch.E. J. 49 (2003) 682) and, in this work, the two distillation columns are heat integrated. The design problem differs from typical column sequencing and heat-integration design, because we can design the reactor composition. Optimal trajectories for heat-integrated recycle plants with direct and indirect sequences are analyzed as the reactor composition of C (z(C)) varies. Provided with correct direction for heat integration, at any given z(C), the flowsheet is established for both sequences. It turns out the heat-integrated recycle plant with direct sequence is economically optimal throughout the entire range of Z(C). For dynamic controllability, the reachable production range is identified as the recycle ratios (recycle flow rate/production rate) vary. Results show that the steady-state controllability deteriorates gradually as the degree of heat integration increases and, to the extreme, at the 50% energy saving line, we have lost one control degree of freedom. However, if the recycle plant is optimally designed (z(C) approximate to 0.6), acceptable turndown ratio is observed and little tradeoff between steady-state economics and dynamic operability may result. Finally, rigorous nonlinear simulations are used to test control performance of different process configurations (with and without heat integration). The results reveal that improved control can be achieved for well-designed heat-integrated recycle plants (compared to the plants without energy integration). More importantly, better performance is achieved with up to 40% energy saving and close to 20% saving in total annual cost. (C) 2003 Elsevier Ltd. All rights reserved.