An air dryer system includes two substantially identical canister-type air dryer units. Each includes a moist air inlet, a first desiccant, a dry air outlet, and a means for supplying dry air to a storage facility. The system also includes a bleed valve supplying a small portion of said dry air to regenerate a second desiccant, and a first moist air purge valve. The system is also operable in an opposite mode and supplies air to a storage facility. Located between the moist air inlets and said desiccants are a pair of air-oil separators. In the air-oil separators, upwardly directed air flows through a housing, strikes a deflector plate, and escapes beneath a vertically extending fence and through vents containing a filter medium.