Abstract: This invention relates to a compact high efficiency furnace having a cylindrical combustion chamber and a fin and tube type heat exchanger substantially parallel, transverse to the furnace air flow, and closely spaced in the air flow direction with no other major heat exchange being utilized. Condensation of fluids from the combustion gases occurs at the fin and tube type heat exchanger, whereby a high efficiency furnace results. The fins and tubes of the heat exchanger are of different materials, requiring that the combustion gas temperature at the heat exchanger inlet be limited.