This thesis aims to improve the dehumidification performance of conventional desiccant wheels by constructing an internally cooled desiccant wheel, in which cooling water was brought into the supply section of the wheel to change the dehumidification process from adiabatic to an isothermal/semi-isothermal process. A literature review regarding desiccant cooling was conducted. A mathematical model was built to analyse the potential parameters influencing the dehumidification performance of various internally cooled desiccant wheel designs. Based on modelled results, two different wheels, for which one had a tube shell structure and the other had a concentric structure, were designed, built and tested. The test results of the concentric design under various operating conditions showed that the outlet process air temperature and humidity were on average 7oC and 0.6 g/kg lower than those from a conventional desiccant wheel. This indicated that the cooling water could remove the released heat due to the adsorption of water vapour by the desiccant and the carryover heat stored in the desiccant matrix from the regeneration section to ensure an isothermal dehumidification process. A series of computer simulations were undertaken to investigate the dehumidification and cooling performance of the desiccant cooling system using the internally cooled desiccant wheel, regenerated using a solar thermal array. This system was modelled when connected to a commercial office building for three different climatic conditions. The simulated results showed that for ambient temperatures of 30oC and a humidity ratio of 16.3 g/kg, the better use of low temperature of regeneration air (60oC or below) became possible when an internally cooled desiccant wheel was adopted. The dehumidification and cooling capacity of the system could be improved by 65% and 40% respectively when using the internally cooled wheel instead of a conventional desiccant wheel. The solar driven desiccant cooling system could not provide enough sensible cooling to the building for a tropical climate due to the high ambient humidity. However, it could supply enough latent and sensible cooling to buildings in sub-tropical and temperate climate zones. Future work would focus on developing more economically feasible desiccant cooling systems that promotes their worldwide application.