An improved single pipe air conditioning system utilizing a slurry of ice crystals in a water-immiscible liquid phase as the heat exchange medium during the cooling cycle. In the system described in U.S. patent 3,384,155, a heated medium and a chilled medium are alternatively circulated in a closed loop, single pipe system to a plurality of individual room units in heat exchange relation with the zones to be air conditioned. In this improvement, a slurry of ice crystals is circulated to the room units during the cooling cycle and since the heat of fusion has significantly greater cooling capacity than the sensible heat available in chilled water, the amount of liquid circulated through the cooling cycle can be greatly reduced. The percentage of ice crystals in the slurry may be controlled by varying the mixing ratio of the streams of water and refrigerant which is brought to direct contact with the water to form the ice slurry.