In this paper, a new configuration of ejector-expansion transcritical CO2 (TRCC) refrigeration cycle is presented, which uses an internal heat exchanger and intercooler to enhance the performance of the new cycle. The theoretical analysis on the performance characteristics was carried out for the new cycle based on the first and second laws of thermodynamics. It was found that, compared with the conventional transcritical CO2 cycle and ejector-expansion transcritical CO2 cycle, the simulation results show that the coefficient of performance and second law efficiency of the new cycle were increased by about 55.5 and 26%, respectively, under the operating conditions that evaporator temperature is 10 degrees C, gas cooler outlet temperature is 40 degrees C and gas cooler pressure is optimum pressure. It is also concluded that the entrainment ratio for the new ejector-expansion TRCC cycle is on average 35% higher than that of the conventional ejector-expansion TRCC cycle. The analysis results are of significance to provide theoretical basis for design optimization of the transcritical CO2 refrigeration cycle with an ejector-expansion device, internal heat exchanger and intercooler. Copyright (C) 2007 John Wiley & Sons, Ltd.