General implementation of air conditioning in buildings and facilities is such that in order to keep room temperature and humidity within predetermined range, heat pump is used to lower the air temperature to achieve desired humidity and then the air is heated to the specified temperature. From energy-saving perspective, this process is inefficient. To overcome such inefficiency, separation of latent heat and sensible heat has been proposed. This is a two-step process in which temperature and humidity are adjusted separately in two steps by combining desiccant dehumidifier and heat pump. Theoretically, the system is known to be effective in reducing energy consumption, but in practical application, this technology can be further improved. For this research, we have chosen liquid desiccant dehumidifier as the desiccant can be regenerated at low temperature. For heat pump system, we have chosen R718 centrifugal as it is suited for increasing efficiency for such combination of desiccant and heat pump. By improving each element of the system and seeking optimization of operating conditions, we aim to develop a high efficiency air-conditioning system. The result is reported here.