A prototype of a desiccant cooling system was designed and tested in the present study for the development of basic design techniques and the assessment of feasibility and market potential in Taiwan. Test results are presented to show the system performance of the desiccant cooling system. It can be seen from the test results that the desiccant cooling system is expected to be able to supply cold air only at a relatively higher temperature (approximately 20°C) with reasonable coefficient of performance (COP) due to the humid weather in Taiwan. Market potential of pure desiccant cooling systems was analyzed and shown not to be optimistic at the present stage due to the low competitiveness in cost compared to the conventional systems, the large installation space required, possible discomfort due to the increased blowing of cold air and a higher fan noise level, maintenance problems caused by polluted air, slow dynamic response, etc..