A water source variable refrigerant flow (VRF) system is comprised of a single or multiple indoor water source units connected to typically several air handling sections via refrigerant pipes. When properly designed and installed, the system provides effective thermal zoning, and capacity modulations at operating efficiency that by far exceeds conventional water source heat pump systems. There are however several factors that reduce the overall efficiency of the system and/or cause premature failure. This article discusses opportunities and precautions to maximize the potential of water source VRF systems.