In this study, development of a novel system for combined water heating, dehumidification, and space cooling is discussed. The system absorbs water vapor from an air stream into an absorbent. The latent heat of absorption, released into the absorbent, is transferred into the process water that cools the absorbent. The solution is regenerated in the desorber, where it is heated by a heating fluid. The water vapor generated in the desorber is condensed and its heat of phase change is also transferred to the process water. The condensed water is then used in an evaporative cooling process to cool the dehumidified air exiting the absorber. Essentially, this open-absorption cycle collects space sensible heat and transfers it to hot water. Another novel feature of the cycle is recovery of the heat energy from the solution exiting the desorber by heat exchange with process water rather than with the solution exiting the absorber. This approach has enabled heating the process water from an inlet temperature of 15°C to 57°C (conforming to the required DOE building hot water standard) and compact fabrication of the absorber, solution heat exchanger, and desorber in plate and frame configuration. The system under development currently has a water heating capacity of 1.5 kW and a thermal coefficient of performance (COP) of 1.45.