The non-isentropic compression processes in the compressor of a vapor-compression system consume more power with increasing thermal lift because of the increasing slope of the constant isentropic line on a log(p)-h diagram. However, in a two-stage system (TSS), compression is performed in stages, thereby allowing the compressors to operate efficiently close to the saturation curve. In this paper, thermodynamic models of the TSS are developed to simulate system performance with respect to the interstage temperature and heat-exchanger parameters. The TSS performance is better than for a simple cycle and depends on the interstage temperature of the flash intercooler. Models are used to derive the optimum total heat exchanger area between the evaporator and condenser.