Abstract Indirect evaporative cooler (IEC) applied as an exhaust air heat recovery component for fresh air pre-cooling in air-conditioned zone, which successfully extends its application range to hot and humid areas. To explore more effective application method of the heat recovery IEC, an energy and exergy transfer model for IEC operating as a heat recovery devices was proposed in this study. The thermal performance and exergy transfer characteristics of three basic types of IECs: cross-flow, counter-flow, and parallel-flow IECs were numerically investigated. The results show that the irreversible heat transfer in the primary air channels and the irreversible mass transfer in the secondary air channels are the main causes of exergy loss. These two factors account for more than 90% of the total exergy destruction in all the three types of IECs. To alleviate this situation and improve the energy efficiency of the IEC, two two-stage modified heat recovery systems which combine IEC with sensible heat exchanger and energy recovery exchanger were proposed and numerical analyzed. The simulation results show that, for the modified systems, the exergy transfer efficiency is increased by 104.6% and 131.7%, while the heat transfer capacity is increased by 47.6% and 48.5%, respectively.