Natural gas is a relatively clean fossil fuel for space heating. However, when it is not used efficiently high consumption can become an environmental problem. In Argentina, individual balanced-flue space heaters are the most extensively used in temperate and cold regions. This furnace is a simple device with a burner set into a metal chamber, separated from the indoor ambient by an enclosing cabinet, and both inlet and outgas chimneys are connected to the outdoor ambient. In previous studies, we measured the performance of these commercial devices, and found very low thermal efficiency (in the range of 39-63% depending on the chimney configuration). The extensive use of these devices is possible due to the availability of unlimited amount of subsidised natural gas to households and businesses. In the present work, we developed a prototype with simple and low cost modifications made on commercial models, and measured the improvements on the thermal efficiency. Findings showed better infrared radiation, enhanced indoor air convection, and passive chimney flow regulation leading to thermal efficiency in the range of 75-85%. These values represent an improvement of 100% when compared to marketed models, and hence, the specific cost of the heater per unit of useful heating power delivered was actually reduced. Considering the large market presence of these furnaces in both residential and business sectors in Argentina, the potential benefits related to gas consumption and environmental emissions are very significant. (C) 2008 Elsevier B.V. All rights reserved.