This paper deals with an investigation of the effect and optimization of control parameters on the system performance in waste heat recovery application using mechanical heat pump (MHP). The experimental studies have been conducted under varying compressor speed, wastewater temperature and flow rate. The experiments have been planned based on Taguchi's L27 orthogonal array with each trial performed under different conditions of compressor's speed, wastewater temperature and flow rate. The optimum parameter combination has been obtained by using the analysis of signal-to-noise (S/N) ratio. The level of importance of the control parameters on the system performance has been determined by using analysis of variance (ANOVA). Main effects plots and interaction effects plots have been utilized to optimize and analyze the relation between the control parameters and the system performance. The results obtained from Taguchi method were also compared with ANN results. The experimental study indicated that it is possible to increase system performance significantly in the waste heat recovery application using MHP. (C) 2011 Elsevier Ltd and IIR. All rights reserved.