It has been found out that heat exchangers with longitudinal grooves produce better heat transfer than those without longitudinal grooves. However, up to now, there have been few investigations and applications of longitudinal grooves in relation to heat transfer associated with friction from the annulus of a heat exchanger. The present investigation examined the effects of longitudinal grooves in a double pipe heat exchanger on the characteristics of heat transfer and friction. Longitudinal rectangular grooves were carved into the outer side of a tube at a specified depth (t) and width (l). The effect of the number of longitudinal grooves, Reynolds number (Re), on the thermal and hydraulic performance was evaluated based on the heat exchanger experimental data. A total of four pipes were used: one pipe with 2 grooves, one pipe with 4 grooves, one pipe with 6 grooves and one pipe with 8 grooves. Water, hot and cold, was used as the working fluid. The test was performed with the cold water as the working fluid, with the Reynolds number from about 33 000 to 46 000 in a counter-flow scheme. The result showed that the number of grooves improved the heat transfer and caused a pressure drop. The increase in heat transfer ranged from 1.05 to 1.15, and the pressure loss of the system reached almost 30% as compared with the smooth annulus, the annulus with no groove. The installation of longitudinal grooves in a heat exchanger system enhanced the process of the heat flow through the boundary but provided a compensation for the pressure loss, which was correlated with the friction and pumping power.