Despite the importance of thermoeconomic analysis in shell and tube heat exchanger design, the determination of the optimum baffle spacing by using the thermoeconomic analysis is usually neglected. On the other hand, baffle spacing is one of the most important parameters used in the design of shell and tube heat exchangers, and there is no precise criterion for the determination of baffle spacing in the literature. In this study, thermoeconomic analysis is used to determine the optimum baffle spacing, accompanied by an example of such an optimization of baffle spacing for a shell and tube heat exchanger. The results of this example are then used to demonstrate how the optimum ratio of baffle spacing to shell diameter is determined precisely and affected by the varying values of the geometrical parameters. Finally, the results are compared to those obtained by classical approaches. (c) 2005 Elsevier Ltd. All rights reserved.