Abstract: A maximum efficiency stove or furnace for heating homes or other buildings is disclosed. The furnace includes a combustion chamber supported within a furnace housing by an ash pan. The combustion chamber is spaced apart from the furnace housing to define an air circulation chamber therebetween. A horizontal flue extends through the upper portion of the air circulation chamber, from the rear of the combustion chamber to the front of the top wall of the furnace housing. The ash pan includes a number of heat transfer tubes projecting therethrough to define a grate upon which the fuel is burned and a secondary grate below the heat transfer tubes. The furnace also includes an ambient air preheating chamber attached to the outside surface of the housing. The air to be heated is drawn through the preheating chamber and admitted into the air circulation chamber, whereupon it flows through the heat transfer tubes, around the combustion chamber and flue, and is then exhausted into the room to be heated.