Abstract A general three-dimensional distributed parameter model (DPM) was developed for designing the plate-fin heat exchanger (PFHE). The proposed model, which allows for the varying local fluid thermophysical properties inside the flow path, can be applied for both dry and wet working conditions by using the uniform enthalpy equations. The grids in the DPM were generated to match closely the flow passage of the heat exchanger. The classical correlations of the heat transfer and the flow friction were adopted to avoid solving the differential equations. Consequently, the computation burden of DPM becomes significantly less than that of the Computational Fluid Dynamics method. The optimal design of a PFHE based on the DPM was performed with the entropy generation minimization taken into consideration. The genetic algorithm was employed to conduct the optimization due to its robustness in dealing with complicated problems. The fin type and fin geometry were selected optimally from a customized fin database. The PFHE included in an environmental control system was designed by using the proposed approach in this study. The cooling performance of the optimal PFHE under both dry and wet conditions was then evaluated.