Abstract: A heat recovery muffler comprising an outer body and having an annular heat exchanger disposed within the body and spaced from the ends thereof. The heat exchanger is provided with a central opening and an exhaust gas inlet pipe is located within the central opening and spaced inwardly therefrom to provide an annular passage. The downstream end of the central opening of the heat exchanger is closed off so that the flow of exhaust gas entering the muffler body through the inlet pipe will be reversed and is directed upstream. The heat exchanger is formed with a plurality of tubes that provide communication between opposite ends of the body, and the exhaust gases, after being reversed in flow, then flow downstream through the tubes in heat exchange relation with a cooling medium, such as water, to cool the exhaust gases and heat the cooling medium. The cooled exhaust gases are discharged to the atmosphere through an outlet pipe in the downstream end of the muffler body.