The Fluidfire shallow fluidized bed heat transfer facility was modified during this program to give increased air flow capacity and to allow testing with different distributor plates and with two-stage heat exchangers. Tests were conducted using this heat transfer facility to investigate the effect of reduced distributor plate pressure loss and amount and type of bed material on the heat transfer performance of a single-stage fluidized bed heat exchanger. Elutriation from the bed was measured for different bed materials and distributor plates; alternate heat exchanger surfaces having different fin spacings were also tested. Two types of two-stage fluidized bed heat exchangers were tested: one having a baffle (having almost no pressure loss) located between the stages and which allowed bed material to recirculate between upper and lower beds; the second having two distributor plates in series with no recirculation of the bed material. The results obtained in the experimental program were used in conceptual design studies of multi-stage fluidized bed heat exchangers for waste heat recovery from diesel engine exhaust gases. Information was obtained from the literature and from diesel engine manufacturers to determine allowable diesel engine operating back pressures. The costs were estimated for two- and three-stage designs and were compared with costs obtained previously for single-stage fluidized bed and conventional heat exchanger designs.