The applications of a transcritical $CO_2$ cycle into water heaters show advantages over conventional systems in the respect of power consumption and heating efficiency because the $CO_2$ cycle has a high compressor discharge temperature. Besides, the heating performance of the transcritical $CO_2$ cycle can be improved by optimizing operating conditions. In this study, the heating performance of a variable speed $CO_2$ heat pump was measured and analyzed by varying refrigerant charge amount, EEV opening, compressor frequency and outdoor temperature. As a result, the optimum normalized charge for heating was 0.226. The COPs at the compressor frequencies of 40, 50 and 60 Hz were 2.94, 2.75 and 2.25, respectively. The heating performance of the $CO_2$ cycle with charge amount was more sensitive than the cooling performance. Moreover, the heating performance was improved significantly by optimizing of compressor frequency and EEV opening.