A heat -pipe heat exchanger was used to recover exhaust heat from the ventilation system of a 4 Mbf capacity research dry-kiln. Heat exchanger effectiveness ranged from 76 to 90 percent for sensible heat transfer under winter operations. Total heat effectiveness ranged from 9.2 to 21.4 percent. Energy savings for spruce-pine-fir studs and 1-inch hard maple was 7.4 and 3.8 percent respectively, which would result in estimated payback periods of 0.6 years for spruce-pine-fir and 1.7 years for 1-inch maple applied to an industrial drying operation.