The laboratory air-handling unit (LAHU) system is designed to improve building energy performance and indoor air quality (IAQ) in laboratory buildings. The LAHU system sends more (up to 100%) outside air to the office section and recirculates the office section air to the laboratory section. This theoretical study shows that the potential annual thermal energy savings varies from 20% up to 40% depending on the climate and ratio of office airflow to the laboratory section airflow. The LAHU provides more outside air intake directly to the office section during both cold winter and hot summer months when the IAQ is critical for building occupants. When the office airflow ratio is less than 50%@ the LAHU provides close to 100% outside air to the office section at all times.