Desiccant wheel based air-conditioning systems (DWAC) include a desiccant wheel component that performs latent cooling coupled to another component, for example an indirect evaporative cooler (IEC also known as a dew point evaporative cooler), that performs the sensible cooling without adding moisture into the air flow. Moisture removal in the desiccant wheel is approximately adiabatic due to heat carryover from the hot regeneration air stream and release °F adsorption heat. This heating °F the air being dried is unwanted and cannot only decrease both the sensible and latent cooling performance °F the system but also requires a high temperature °F regeneration air to drive the desiccant wheel to work in hot and humid climate. Ideally the moisture removal pr°Cess for desiccant wheel would be isothermal instead °F adiabatic. Thus, here we propose an internally cooled desiccant wheel design that °Ffers nearly isothermal dehumidification and then use a mathematical model to analyze the performance °F a complete DWAC system incorporating this component.The new design uses 78.8°F (26°C) cooling water in the pr°Cess section °F the desiccant wheel as a cooling source to reduce the effects °F adsorption heat and carryover heat. A model validated by the experimental data for internally cooled desiccant wheel and a commercial indirect evaporative cooler are then adopted to assess the performance °F the DWAC system. Results show that for inlet air conditions °F 95°F (35°C) and 60% relative humidity, the proposed DWAC system with internally cooled desiccant wheel could adsorb at least 0.0053lb (2.4g) moisture more (for per 2.2lb (1kg) dry air dry air) per second compared to a DWAC system using an adiabatic wheel when regeneration air temperature is 140°F (60°C) which could be easily gotten from a solar thermal collector. In addition, the electrical coefficient °F performance for the internally cooled desiccant wheel system is calculated to be between 7 and 13 compared to 5.2 to 8.2 for the adiabatic wheel system. These results indicate that a DWAC system with an internally cooled wheel would be up to twice as efficient as the most efficient split system air-conditioners and three times as efficient as the Australian market average °F new installed split systems in 2014 in hot and humid climate (dry bulb temperature is 95°F (35°C) and relative humidity is 60%).