A heat pump clothes dryer (HPCD) is an innovative appliance that uses a vapor compression system to dry clothes. Air circulates in a closed loop through the drum, so no vent is required. The condenser heats air to evaporate moisture out of the clothes, and the evaporator condenses water out of the air stream. As a result, the HPCD can achieve 50% energy savings compared to a conventional electric resistance dryer. We developed a physics-based, quasi-steady-state HPCD system model with detailed heat exchanger and compressor models. The system model is able to simulate the inherently transient HPCD drying process, to size components, and to reveal trends in key variables (e.g. compressor discharge temperature, power consumption, required drying time, etc.) The system model was calibrated using experimental data on a prototype HPCD. Air leakages, in and out, along the closed air circulation path of HPCD cause varied effects on the performance. Understanding the location, magnitude, and direction of air leakage of the heat pump clothes dryer is critical for accurately characterizing the performance and developing a high-performance design. The system model was used to reveal the impacts. In addition, model-based parametric optimizations were conducted to design the HPCD air path and leak points for optimum performance