A residential-size ground-source integrated heat pump (GSIHP) system has been developed and is currently being field tested. The system is a nominal 2-ton (7 kW) cooling capacity, variable-speed unit, which is multi-functional, e.g. space cooling, space heating, dedicated water heating, and simultaneous space cooling and water heating. High-efficiency brushless permanent-magnet (BPM) motors are used for the compressor, indoor blower, and pumps to obtain the highest component performance and system control flexibility. Laboratory test data were used to calibrate a vaporcompression simulation model (HPDM) for each of the four primary modes of operation. The model was used to optimize the internal control options and to simulate the selected internal control strategies, such as controlling to a constant air supply temperature in the space heating mode and a fixed water temperature rise in water heating modes.Equipment performance maps were generated for each operation mode as functions of all independent variables for use in TRNSYS annual energy simulations. These were performed for the GSIHP installed in a well-insulated 2600 ft2(242 m2) house and connected to a vertical ground loop heat exchanger(GLHE). We selected a 13 SEER (3.8 CSPF )/7.7 HSPF (2.3 HSPF, W/W) ASHP unit with 0.90 Energy Factor (EF) resistance water heater as the baseline for energy savings comparisons. The annual energy simulations were conducted over five US climate zones. In addition, appropriate ground loop sizes were determined for each location to meet 10-year minimum and maximum design entering water temperatures (EWTs) to the equipment. The prototype GSIHP system was predicted to use 52 to 59% less energy than the baseline system while meeting total annual space conditioning and water heating loads.