Abstract: A method and apparatus are disclosed for simultaneously regulating the temperature of interior air, and ventilating the interior air with air from outside by means of passing said interior air through an interior heat exchanger, simultaneously passing outside air through an outside heat exchanger, extracting a portion of the inside air, and directing it to the outside air for venting outside, simultaneously extracting a portion of the outside air and venting it to the inside air, continuously passing a heat exchange medium into one of the heat exchangers, and transferring the heat exchange medium from one heat exchanger to the other heat exchanger, via an expansion device to procure transfer of heat from one heat exchanger to the other, and passing the heat exchange medium through flow controls, responsive to temperature of the inside air, to selectively direct flow of medium either to one of the heat exchangers or to the other. Also disclosed is a method of regulating temperature by means of the system.