In conventional air-handling units, when the circulated air from the air-conditioned space pass through the cooling coil, the air is over-cooled to eliminate the moisture as well as to decrease the temperature. The purpose of this study is to estimate the thermal performance and energy saving of the cooling/reheating system using heat exchanger which can save both cooling energy and reheating energy by exchanging heat between the cooled air and reheated air. The energy balance equations to estimate the state of the air for each components were provided and the heat transfer rates and the energy saving rates for the system were calculated from the equations. The results showed that the energy saving was up to 40% under present conditions, and saving rates were significantly affected by the air velocity, inlet conditions and the effectiveness of heat exchanger.