Abstract: A heat pump system (10) includes a fluid refrigerant compressor (12) and heat exchanger units (14, 16). Heat transfer tubings (36, 50, 58, 60, 66, 82) interconnect the fluid refrigerant compressor (12) and the heat exchanger units (14, 16) in a series relationship for carrying refrigerant fluid. Flow control valves (22, 24) are provided and are interconnected between a water source (20) and the heat exchanger unit (16) for controlling the amount of water flowing from the water source (20) to the heat exchanger unit (16). The flow control valves (22, 24) are responsive to the pressure at the outlet (12b) of the fluid refrigerant compressor (12) sensed at port (26) in the heat transfer tubing (58) to automatically optimize the operating condition of the heat pump system (10). To further optimize the heat pump system (10) in the heating mode, water from source water (20) flows through preheat exchanger (104) before entering heat exchanger unit (16 ).