The present study presents an overview of CO2 heat pump water heater for residential use in Japan. The contents include the general background, current market, and the technology evolvement of the transcritical CO2 system, especially on the key components like compressor and gas cooler. Some cutting edge technology associated with the high efficient compressors and its integration with expander, such as swing compressor, sub-compressor, two-stage compressor, scroll expander, and dual-sided scroll-type expander are elaborated in this review. Some ingenious tube designs to promote the performance of gas cooler are also studied. In practice, the dominant thermal resistance may occur in the CO2 side or water side, thereby implementing twisted tube or dimple tubes may be quite effective. The placement of enhancement on the water side is especially effective when the operational pressure is close to the critical pressure whereas heat transfer enhancement is more helpful if the operational pressure is comparatively high. For augmentation on the CO2 side, it would be more beneficial to place enhancement a distance away from the pseudo-critical region.