A heat exchanger assembly is provided for a marine propulsion system having a closed loop cooling system. The heat exchanger body encloses a series of tubes carrying sea water which removes heat from the engine coolant. The heat exchanger includes an integrally connected top tank. A single venting orifice is provided into the top tank from the heat exchanger body. A heat exchanger coolant outlet is in direct fluid communication with both a system bypass and the coolant in the top tank. An auxiliary inlet for coolant from the top tank is located in the heat exchanger coolant outlet downstream of the bypass inlet, thereby promoting the ability of the system to draw coolant through the top tank rather than the bypass. The invention minimizes cavitation and reduces the creation of negative pressure at the circulating pump.