A fan coil unit (FCU) contains a fan which draws the air in a space into the unit then blows it over a cooling or heating coil. The air comes out of the FCU either cooler or hotter than before. They are used in some office buildings and shopping centres and typically specified where there are multiple small spaces requiring individual control. Typically an individual FCU serves only up to 150m², so there can be tens or even hundreds in a building. FCUs are, however, most commonly used as a supplement to a building for which other HVAC systems provide the majority of the air-conditioning.

FCUs will generally have a chilled water coil for cooling and either a hot water coil for heating or an electric heating element. Chilled water is provided from a chiller located in the central plant, and hot water form a boiler.