A non-cryogenic system for producing ultra-pure nitrogen includes a pressure swing adsorption (PSA) unit for converting incoming ambient air into a process stream containing mainly nitrogen. The process stream is combined with hydrogen, in a reactor, to remove residual oxygen. The process stream is then cooled, and the cooled process stream is directed through a dryer. The output of the dryer is ultra-pure, dry nitrogen. The dryer contains at least two sections, one being the active section and the other section being regenerated. A portion of the output nitrogen leaving the active section is directed back into the section being regenerated, where it absorbs moisture, and is then recycled to the PSA unit. The result is an ultra-pure and dry product. The invention avoids the need for providing heat to the dryer, and also eliminates the need for many of the components used in prior art systems. The invention is economically operated even for small or medium-sized flow rates.