An exhaust gas heat exchange system for an internal combustion engine (10) includes an intake manifold (12) including an inlet (16) for recirculating exhaust gases and an exhaust manifold (28) having at least one inlet (30) for receiving exhaust gas from the engine (10) and an outlet (36), (60), for discharging exhaust gas and spaced from the inlets (30). An exhaust gas heat exchanger (32) includes a first flow path having an inlet (50) connected to the exhaust manifold (32) to receive exhaust gas therefrom, an outlet (52) for discharging cooled exhaust therefrom and a second flow path in heat exchange relation with the first flow path for receipt of a coolant whereby exhaust gas flowing in the first flow path may be cooled. An exhaust valve (32) has a first inlet (44) connected to the first flow path of the heat exchanger (32), a second inlet (47) connected to the exhaust manifold (28) and an outlet (48) connected to the intake manifold (12) together with a valve mechanism having at least one movable component (56) movable between positions connecting the first inlet (44) and the outlet (48) and connecting the second inlet (47) and the outlet (48). An actuator (76) is connected to the exhaust valve (32) for operating the same.