A multi-type heat pump controls the mass flow rate of the working fluid to cope with variable heat loads when it is under dynamic load condition. This paper describes the exergy analysis associated with the unsteady response of a heat pump. First, a basic heat pump cycle is examined at a steady state to show the general trends of exergy variations in each process of the cycle. Entropy generation issue for the heat exchangers is discussed to optimize the heat pump cycle. Secondly, the performance of the inverter-driven heat pump is compared to that of the conventional one when the heat load is variable. Thirdly, the exergy destruction rate of the heat pump with On/Off operation is calculated by simulating the thermodynamic states of the working fluid in the condenser and the evaporator. The inefficiency of On/Off operation during the transient period is quantitatively described by the exergy analysis.