A thermodynamic analysis of the R404A refrigeration system with an internal heat exchanger using R744 as a secondary refrigerant is presented in this paper to optimize the design for operating parameters of the system. The main results are summarized as follows: The COP increases with increasing subcooling and superheating degree of R404A, internal heat exchanger and compression efficiency of the R404A cycle and evaporating temperature of the R744 cycle and decreasing temperature difference of the cascade heat exchanger and condensing temperature of the R404A cycle. The mass flow ratio decreases with increasing evaporating temperature of the R744 cycle and internal heat exchanger efficiency of the R404A cycle and decreasing subcooling and superheating degree of the R744 cycle, temperature difference of the cascade heat exchanger and condensing temperature of the R404A cycle.