The Fundamental Difference

Every mechanical cooling system ultimately does the same thing — moves heat from inside a building to outside it using a vapor-compression refrigeration cycle. The question is where that refrigeration cycle happens and what medium carries the cooling effect to the occupied space. A DX (direct expansion) system puts the evaporator coil directly in the airstream being conditioned — refrigerant expands and evaporates right where the air is cooled, whether that's a rooftop unit, a split system condensing unit paired with an indoor fan coil, or a packaged terminal unit. A chilled water system separates the two steps: a central chiller runs the refrigeration cycle to produce chilled water (typically 42–45°F supply), and that water is pumped through a piping distribution network to remote air handling units (AHUs) or fan coil units, where it absorbs heat from the airstream via a cooling coil before returning to the chiller.