The noise sources in the outdoor unit of RAC are identified by the sound intensity method. The main noise sources are compressor noise and fluid noise which is caused by the fan. heat exchanger and shroud. First. the fluid noise is reduced through the design of new fan and shroud. reduction of the system resistance by rearrangement of heat exchanger. and optimization of the complex parameter between the fan and shroud. Next, in order to reduce the compressor noise, the new shape of compressor mount and sound-proof material was applied. As a result, the overall noise was reduced by 4∼5dB (A).