Since a transcritical $CO_2$ cycle shows lower performance than conventional air conditioners in the cooling mode operation, it is required to enhance the performance of the $CO_2$ cycle by applying advanced technologies and optimizing components. In this study, the cooling performance of a $CO_2$ system measured by varying refrigerant charge amount, compressor frequency, EEV opening and length of internal heat exchanger. As a result, the cooling COP of the basic system without internal heat exchanger was 2.1. The cooling performance of the modified cycle applying internal heat exchanger improved by $4-9\%$ over the basic cycle.