Abstract: An air conditioning or refrigeration system having a subcooler (18) for subcooling liquid or hot gaseous refrigerant before the refrigerant is supplied to a heat exchanger, such as an evaporator (24) or a condenser (14). The refrigerant subcooler or precooler (18, 18A, 18B) utilized in the method and apparatus of the refrigeration system has an inner cylindrical housing (38, 38A) positioned in concentric relation to an outer cylindrical housing (48, 48A) and forming an annulus (53, 53A) therebetween. A small portion of refrigerant is diverted from the main body of refrigerant at the subcooler (18, 18A) and is passed through an expanison valve (32, 32A) for vaporizing upon entering the subcooler (18, 18A).