In this study, a direct expansion solar-assisted heat pump water heater (DX-SAHPWH) with rated input power 750 W was tested and analyzed. Through experimental research in spring and thermodynamics analysis about the system performance, some suggestions for the system optimization are proposed. Then, a small-type DX-SAHPWH with rated input power 400 W was built, tested and analyzed. Through exergy analysis for each component of DX-SAHPWH (A) and (B), it can be seen that the highest exergy loss occurs in the compressor and collector/evaporator, followed by the condenser and expansion valve, respectively. Furthermore, some methods are suggested to improve the performance of each component, especially the collector/evaporator. A methodology for the design optimization of the collector/evaporator was introduced and applied. In order to maintain a proper matching between the heat pumping capacity of the compressor and the evaporative capacity of the collector/evaporator under widely varying ambient conditions, the electronic expansion valve and variable frequency compressor are suggested to be utilized for the DX-SAHPWH. (c) 2006 Elsevier Ltd. All rights reserved.