In the past few years, a renewed interest has been noted here in the northwest in the use of heat pumps to supply building energy needs. In particular, large water source heat pumps which provide for both heating and air conditioning requirements have been installed in a number of locations. Because such systems are able to capitalize on key resources unique to the area, they offer a significant potential for energy savings. However, in order to achieve this potential, it is critical that these systems be applied in a manner consistent with long term reliability. It is the purpose of this article to highlight the positive aspects of large water source heat pump systems and to contrast those advantages with some cautions relating to system installation