This study investigates the effect of air bubble injection on the thermal performance of a vertical counter-current coiled tube heat exchanger. A cylindrical PVC shell (height: 500 mm, diameter: 152.4 mm) was constructed to carry a copper coil with 11 regular turns and covered approximately 76% and 75% of the total shell height and diameter, respectively. The key operational parameters involving the shell side flow rate (2–10 L/min), the coil side flow rate (1–2 L/min), the air flow rate (0–10 L/min) and the temperature difference between the hot and cold fluids ((20 °C, 30 °C and 36 °C) were tested to determine the overall heat transfer coefficient (U). Air was injected into the shell side of the heat exchanger as bubbles with an average diameter of approximately 100 μm via a porous sparger. The results showed that air injection significantly enhanced U, with the highest improvement (158%) occurring at an air flow rate of 6 L/min, while the minimum improvement was 34%. Furthermore, the ratio of the overall heat transfer coefficient with air injection to that without air injection had its maximum value at a shell side flow rate of 6 L/min.