•A novel combined R134a and transcritical CO2 heat pump was studied.•Ambient temperature had a large effect on the system performance.•The system offered a stable temperature hot water with a better performance.•The comparison results showed that the system improved the COP by up to 22%. In this paper, a novel combined R134a and transcritical CO2 system was studied theoretically and experimentally for space heating. Experimental results showed that the ambient and space heating temperatures substantially affected the system performance. At the heating requirement with 50 °C in feed water temperature and 70 °C in supply water temperature, the heating capacity and coefficient of performance (COP) increased by 32.6% and 18.2%, respectively, as the ambient temperature increased from −20 °C to 0 °C. The system COP increased by up to 15% at fixed ambient condition as the feed and supply water temperatures decreased from 50 °C/70 °C to 40 °C/50 °C. A mathematical model was also developed and validated using experimental data. The model was used to investigate the performance improvement of the combined system in comparison to the standard transcritical CO2 system. The comparison results showed that the combined system improved the COP by up to 22%.