Abstract The absorption heat pump technology plays an invaluable role in energy structure optimization and sustainable development. In this research, the steam operated double effect water-LiBr absorption heat pump is introduced and the performance is studied at nominal and part load conditions. Mathematical models are developed and verified by experiments, and the results indicate that the maximum deviation is about 13% at heating condition and 9% at cooling condition. An optimization analysis is presented with mathematical models to optimize the absorption heat pump. The optimal combination of multi-factorial internal parameters, which are the eight main heat transfer temperature differences, are obtained from the thermoeconomic optimization analysis. The results will be much helpful in the design and optimization of double effect water-LiBr absorption heat pumps.