This paper presents simulation results of a modified air-source heat pump, which is optimized for cold climates and is to be field tested in Army barracks at Camp Atterbury, Indiana. The heat pump is designed to provide approximately 65,000 Btu/hr (19 kW) of heat at an ambient temperature of -4 0F (-20 °C) while achieving a heating COP that is approximately 45% of the seasonal Carnot heating COP. The heating requirements were calculated using a building load simulation tool, eQUEST. It is intended that the heat pump meets 100% of the building load throughout the year. The major modification from conventional air-source heat pumps is the introduction of two-stage compression with a closed economizing loop where two-phase refrigerant is injected between the compression stages. Components were selected based on their commercial availability in an attempt to aid the commercialization potential of the entire system for a potential Department of Defense implementation. Using the system simulation at different ambient temperatures and compressor configurations, the heat pump components were selected. The high-side compressor is to be a large displacement, variable-speed scroll compressor while the low-side compressor is to be a large displacement, fixed-speed, tandem scroll compressor. The results show that the selected configuration will yield a heat output of 57,938 Btu/hr (16.98 kW) at the design ambient tem perature achieving a heating COP of 2.38 and a 2nd law efficiency of 44%.