The use of microencapsulated phase change material (MPCM) slurry as an enhanced heat transfer fluid is considered to be very promising for saving energy in thermal energy systems. However, little is known how MPCM may exhibit enhanced heat transfer performance in coil heat exchanger. Coil heat exchangers are extensively used in industrial applications including heating, ventilating and air conditioning (HVAC) systems because of their superior heat transfer performance and compactness. In this study, the heat transfer characteristics of MPCM slurry in a coil heat exchanger have been investigated experimentally. Thermal properties of MPCM slurry were measured using a differential scanning calorimeter. Pressure drop, overall heat transfer coefficient and heat transfer effectiveness in a coil heat exchanger were determined by considering different flow rates. It was found that heat transfer characteristics were positively affected by the phase change process of the phase change material in MPCM, even though MPCM exhibit reduced turbulence and increased pressure drop. The overall heat transfer coefficient for MPCM slurry is in the range of 5,000 to 9,000 W/m2-K over a Dean number range from 1,600 to 4,000 (equivalent Reynolds number range of 6,000 to 15,000). The enhancement in heat transfer performance is about 17% when compared to that for water. In addition, durability tests of MPCM slurry were conducted to evaluate the MPCM’s ability to withstand continuous pumping conditions, which is critically important in the implementation of MPCM slurry in industrial applications.