The present study investigates the improvement in the performance of an absorption heat pump for residential space-conditioning due to the use of the ground as the heat source in the heating mode and the heat sink in the cooling mode. A baseline air-coupled single-effect ammonia-water heat pump is first designed to deliver 10.55 kW (36,000 Btu/hr) of cooling load at the ARI rating conditions. Particular attention is paid to incorporating many realistic details of an operating system such as fuel combustion efficiencies of the burner, non-equilibrium conditions, and moist air processes in the air-coupled heat exchangers. A range of parametric studies is also conducted to investigate the variation in performance of this system with ambient conditions in the heating and cooling modes. The same system is then analyzed in a ground-coupled configuration. The instantaneous COP for the ground-coupled system is compared with the COP of the air-coupled system as a function of the time of the year and the corresponding variations in ambient and ground temperatures using thirty-year average climate data for various locations from the National Weather Service. Improvements in COP of up to twenty percent over the air-coupled system values (cooling mode COP of 0.495 at 35°C (95°F) and heating mode COP of 1.20 at 8.33°C (47°F)) are demonstrated in diverse geographic locations with widely varying heating and cooling loads. These improvements indicate that an efficient ground-coupled heat pump could be developed for residential space-conditioning applications using simple thermodynamic cycles and existing technology for the heat and mass exchange components.