In this paper, an analysis on performance and exergy of R404A refrigeration system using R744 secondary refrigerant was performed numerically to optimize the design for the operating parameters. The operating parameters considered in this study include subcooling and superheating degree, internal heat exchanger and compression efficiency, evaporation and condensation temperature in the R404A refrigeration cycle and temperature difference of cascade heat exchanger. The main results are summarized as follows : The COP(coefficient of performance) of R404A refrigeration system increases with increasing evaporation temperature. The evaporation capacity of R744 as secondary refrigerant increases with the increase in evaporation pressure of R744 secondary refrigeration. And the enthalpy in the evaporator outlet of R744 increases with the increasing evaporation pressure of R744 secondary refrigeration. Therefore, it is important to analysis for the relationship between COP of R404A refrigeration system and refrigeration capacity of R744. As cascade evaporation temperature increase, the exergy loss of condenser and compressor using R404A is the largest among all components. Therefore, the exergy loss in the condenser and compressor using R404A must be decreased to enhance the COP of R404A refrigeration system with R744 secondary refrigerant.