Abstract: A refrigeration circuit is provided for use in a combined water heating, space heating and cooling system which includes a three way diverter valve and a four way reversing valve controlled to direct refrigerant flow in six modes: to heat a space; cool a space; heat a space and heat water by desuperheating refrigerant vapor; cool a space and heat water by desuperheating refrigerant vapor; heat water as a priority without affecting space temperature; and simultaneously heat water by condensation of refrigerant vapor while cooling a space.