Abstract An indirect evaporative chiller is a device used to produce chilled water at a temperature between the wet bulb temperature and dew point of the outdoor air, which can be used in building HVAC systems. This article presents a theoretical analysis and practical performance of an innovative indirect evaporative chiller. First, the process of the indirect evaporative chiller is introduced; then, the matching characteristics of the process are presented and analyzed. It can be shown that the process that produces cold water by using dry air is a nearly-reversible process, so the ideal produced chilled water temperature of the indirect evaporative chiller can be set close to the dew point temperature of the chiller’s inlet air. After the indirect evaporative chiller was designed, simulations were done to analyze the output water temperature, the cooling efficiency relative to the inlet dew point temperature, and the COP that the chiller can performance. The first installation of the indirect evaporative chiller of this kind has been run for 5 years in a building in the city of Shihezi. The tested output water temperature of the chiller is around 14–20 °C, which is just in between of the outdoor wet bulb temperature and dew point. The tested COP r,s of the developed indirect evaporative chiller reaches 9.1. Compared with ordinary air conditioning systems, the indirect evaporative chiller can save more than 40% in energy consumption due to the fact that the only energy consumed is from pumps and fans. An added bonus is that the indirect evaporative chiller uses no CFCs that pollute to the aerosphere. The tested internal parameters, such as the water–air flow rate ratio and heat transfer area for each heat transfer process inside the chiller, were analyzed and compared with designed values. The tested indoor air conditions, with a room temperature of 23–27 °C and relative humidity of 50–70%, proved that the developed practical indirect evaporative chiller successfully satisfy the indoor air conditioning load for the demo building. The indirect evaporative chiller has a potentially wide application in dry regions, especially for large scale commercial buildings. Finally, this paper presented the geographic regions suitable for the technology worldwide.