Although ordinary heat exchanger may be extremely different in design and construction and may be of the single- or duplex-phase type, their modes of operation and effectiveness are largely determined by the direction of the fluid flow within the exchanger.

The most common arrangements for flow paths within a heat exchanger are counter-flow and parallel flow. A counter-flow heat exchanger is one in which the direction of the flow of one of the working fluids is opposite to the direction to the flow of the other fluid. In a parallel flow exchanger, both fluids in the heat exchanger flow in the same direction.

Figure 9 represents the directions of fluid flow in the parallel and counter-flow exchangers. Under comparable conditions, more heat is transferred in a counter-flow arrangement than in a parallel flow heat exchanger.

The temperature profiles of the two heat exchangers indicate two major disadvantages in the parallel-flow design. First, the large temperature difference at the ends (Figure 10) causes large thermal stress. The opposing expansion and contraction of the construction materials due to diverse fluid temperatures can lead to eventual material failure. Second, the temperature of the cold fluid exiting the heat exchanger never exceeds the lowest temperature of the hot fluid. This relationship is a distinct disadvantage if the design purpose is to raise the temperature of the cold fluid.

The design of a parallel flow heat exchanger is advantageous when two fluids are required to be brought to nearly the same temperature.

The counter-flow heat exchanger has three significant advantages over the parallel flow design. First, the more uniform temperature difference between the two fluids minimizes the thermal stresses throughout the exchanger. Second, the outlet temperature of the cold fluid can approach the highest temperature of the hot fluid (the inlet temperature). Third, the more uniform temperature difference produces a more uniform rate of heat transfer throughout the heat exchanger.

Whether parallel or counter-flow, heat transfer within the heat exchanger involves both conduction and convection. One fluid (hot) convectively transfers heat to the tube wall where conduction takes place across the tube to the opposite wall. The heat is then convectively transferred to the second fluid. Because this process takes place over the entire length of the exchanger, the temperature of the fluids as they flow through the exchanger is not generally constant, but varies over the entire length, as indicated in Figure 10. The rate of heat transfer varies along the length of the exchanger tubes because its value depends upon the temperature  difference between the hot and the cold fluid at the point being viewed.