An investigation on enhancement of heat transfer is carried out for a double pipe heat exchanger in which the outer wall of the inner pipe is provided with circumferential labyrinth passages. Rectangular and triangular cavities with fixed labyrinth tooth thickness, height, and pitch are considered and the effect of added labyrinth structures on the heat transfer characteristics is discussed. A two-dimensional steady numerical simulation is carried out using ANSYS-FLUENT software. The flow Reynolds number equals to 20 000 and 43 000 for the hot and cold fluids, respectively, while other fluid properties are constant. From the numerical analysis carried out in this work, it is identified that the added labyrinth passages in the heat exchange surface improve the heat transfer rate and can reduce the length of the heat exchanger. Numerical predictions agree well with the results obtained from the experiment conducted.