An improved refrigerant system incorporates at least two circuits arranged in a cascaded relationship. Preferably, the upper circuit utilizes a hydrocarbon refrigerant and preferably the lower circuit utilizes CO2 refrigerant. Preferably, the CO2 circuit mainly operates in a subcritical region. To improve the efficiency and capacity control of the cascaded refrigerant system, at least one of the circuits is equipped with performance enhancement features such as, for example, an economized function provided by a flash tank or economizer heat exchanger. Additional enhancement features can also include a liquid-suction heat exchanger and bypass function.