This report compares the energy performance and life-cycle cost of central and individual heating, ventilating, and air-conditioning (HVAC) systems as well as domestic hot water (DHW) systems in new multifamily buildings. The different systems were analyzed by using DOE-2.1C to model prototypical apartment buildings in Chicago and Atlanta with Weather Year for Energy Calculation weather data. The building is equipped with either a central chiller and gas-fired boiler, which supply four-pipe fan coils in each apartment, or is conditioned by individual packaged terrninal air conditioners in each apartment. The building with central HVAC also has a central, gas-fired domestic hot water system; the building with individual units has electric water heaters in each apartment. The individual systems were modeled with and without a setback therrnostat. The use of natural gas for space and water heating and the more efficient central chiller resulted in an annual energy cost savings for the central system in both cities. A life-cycle cost comparison of system types shows that apartment buildings with as few as five units in Chicago and as few as 30 units in Atlanta should be designed with central HVAC and DHW systems. We also did a sensitivity analysis to indicate the effect of various assumptions on the results.