Relative humidity control in air-conditioning systems is an important aspect of the maintenance of good indoor air quality. However, considerable reheat energy is needed to control relative humidity using conventional reheating coils. For improved energy efficiency a thermosyphon heat pipe heat exchanger is under investigation using a Hilton Air-Conditioning Laboratory Unit in RMIT. The study involves aspects of the heat exchanger, including temperature effectiveness, capability of energy recovery and relative humidity control of delivered air. It is observed that this type of heat exchanger can be an advantageous replacement for conventional reheat coils, resulting in energy saving and enhancing the cooling capability of the cooling coils with little or no external energy needed.