Heat pump water heaters (HPWH) with an outdoor heat exchanger are a promising technology to more efficiently heat water. This project conducted lab tests of a variable-speed, CO2 refrigerant HPWH with the heat exchanger located in the outdoor unit. The testing plan included observing heat pump efficiency at a range of outdoor ambient temperatures from 17°F to 95°F; conducting the standard 24-hour and 1-hour rating tests; measuring outdoor unit noise levels; and quantifying the number of efficient showers delivered with the outdoor unit operating at 50°F ambient conditions. The tests showed high coefficients of performance and Energy Factors at an outdoor temperature range from 17°F to 95°F. Further, the tests also demonstrated the heat pump maintained output capacity over the temperature range. Overall, the results suggest the HPWH is an extremely efficient heat pump water heater and suitable for all domestic water heating applications in the Pacific Northwest.