Abstract The effect of a cylindrical baffle on heat transfer to an immersed heat exchanger is investigated in initially thermally stratified tanks. The heat exchanger is located in the annular region created by the baffle and the tank wall. Three different cases of initial thermal stratification are explored, and in each case, experiments are conducted with and without the baffle in the stratified tank and in a comparable isothermal tank with the same initial energy, enabling exploration of the role of the baffle in a stratified tank and the role of stratification in tanks with or without the baffle. The baffle maintains the high initial temperature of the upper zone of the stratified tank for 10–16 min, as cool plumes that form on the heat exchanger are confined to the annular baffle region until they exit at the bottom of the tank. Regardless of stratification, the baffle always improves heat transfer to the immersed heat exchanger. In the isothermal tanks, the baffle increases total energy extracted in the first 30 min of discharge by over 20%. In stratified tanks, the baffle increases total energy extracted in 30 min of discharge by 9–16%. Initially, improvement in heat transfer in stratified tanks is due to the higher driving temperature differences around the heat exchanger. Later, after all the water from the hot zone has entered and flowed through the baffle, the tank is basically isothermal, and velocity increases as the fluid temperature drops, maintaining rates of heat transfer higher than that in the tank without the baffle. Stratification improves heat transfer in tanks without a baffle because, by design, the driving temperature difference between the heat exchanger wall and the surrounding fluid is considerably higher. However, in tanks with the baffle, stratification has only a modest positive effect on heat transfer to the immersed heat exchanger.