Vapor compression is an effective method of desalination in a small scale system. Such system has two hot outlet flows. These flows are used to preheat the feedwater. In this research, tube-in-tube heat exchanger with different number of inner tubes was designed and constructed as preheater. This heat exchanger contains many inner tubes where each tube is a separate inner flow line for hot flow. Heat exchanger was tested with one, two and three inner tubes. Volumetric flow rates varried from 30 to 120 lit/hr in annulus and 20 to 90 lit/hr for inner tubes respectively. The results showed that by changing number of inner tubes from 1 to 3, heat transfer increased 29%. However, 38.4% decrease in equivalent hydraulic diameter led to 22% drop in average nusselt number. Afterward, a dimensionless coefficient of performance enhancement, defined as the ratio of heat transfer rate variation and the required pumping power, used to determine number of inner tubes. The results implied that heat exchanger performance improved by increasing the number of inner tubes from 1 to 2. But there is no significant improvement when number of inner tubes changes from 2 to 3. Finally, a semi-emperical equation is presented for determination of Nusselt number in a heat exchanger with two inner tubes. This study indicated that this type of heat exchanger has the best performance for the system within the tested range.