This paper introduces the concept of separation of two-phase flow in condenser as a way to improve condenser efficiency. The benefits of vapor-liquid refrigerant separation and the reason why it will improve the condenser performance are explained. Numerical studies are presented on the effects of separation on performance of an R134a microchannel condenser. A modeling comparison with a baseline parallel flow microchannel condenser demonstrates that the separation condenser can condense a higher flow rate. The condenser refrigerant outlet temperature of the separation condenser is lower than the baseline by up to 0.7°C at the same refrigerant inlet state, based on the model prediction. In addition, condenser pass circuiting with pre-assumed separation results in the header is investigated by the model and results are presented.