The thesis presents the development of a novel expander-compressor unit, named cross vane expander-compressor, or in short CVEC. This device is conceived with the primary motivation of integrating the function of the expander and compressor into a single simple geometry, making energy recovery and efficiency improvement economically practical.Mathematical models have been formulated in this project to facilitate the understanding of the working physics in the 'expander' and 'compressor' of the CVEC. These include volume variations of the working chambers, kinematics of the mechanism, variation of thermodynamics properties of the working fluid, mass flow through suction and discharge ports, the response of the valve reed to pressure and centrifugal forces, the internal leakage of the working fluid through the gaps of the mating components within and across the chambers of the 'expander' and the 'compressor' and the mechanical losses of the machine. An attempt has also been made to analyse the heat transfer of the machine, following which Second Law analysis was carried out to quantify the exergy losses.Theoretical studies were carried out with R-1234yf as the working fluid, operating at the condensing and evaporating temperatures of 54.4°C and 7.2°C, respectively. The results show that through the use of CVEC, the system's COP was improved by 29.5% and the peak power input was reduced by 6.5% at 3000 rpm. The study also reveals that machines with a slender configuration or that with a lower rotating inertia would result in a higher mechanical efficiency. The highest mechanical efficiency of the machine was predicted to be 85.1% at slender ratio of 6.28 (i.e. expander-compressor length of 151.0 mm and outer cylinder radius of 24.1 mm).Additionally, it was found that the major internal leakage occurs through the split bush clearances with 74.1% of the total leakage. This leakage is the main reason behind the drop in pressure in the expansion chamber of the expander and compression chamber of the compressor. The results also show that major mechanical loss is caused by the end-face friction which accounts for 61.9% of the total losses.A prototype has been designed, fabricated and instrumented in an open-loop air-flow system.Tests were conducted from 600 to 1300 rpm. Due to severe internal leakages that occurred in iv the machine, only a limited range of pressures for expander suction and compressor discharge pressure was possible, and in this case, it was from 1.1 to 1.7 bar.The measured data were used to validate the mathematical models. It was found that the average standard deviation between the measured and predicted average torques is 10.5% and that of mass flow rates is 16.1%. Additionally, the comparison between the measured and predicted results shows that the mathematical model is capable of predicting the variation of pressure in the working chamber. As a result of severe internal leakages, the volumetric efficiencies of the machine were measured to be 3.6% to 63.6%.With the validated mathematical model, th...