A demand controlled ventilation system maintains indoor air quality with minimum outdoor air intake. Much of the ventilation air conditioning energy is eliminated by transferring heat and moisture to the exhaust air using passive heat and mass-transfer methods. Air approaching the dehumidification coil is precooled by passively transferring heat to the dry air as it exits the coil. The remaining dehumidification is accomplished by a system that achieves high efficiency by matching compression ratio to the narrow range (25K) presented by the novel DOAS design. By providing dry ventilation air, the balance (~60%) of the cooling load (heat of conduction and internal gains) is also more efficiently accomplished using a compressor tuned for a much lower compression ratio (<10K in precooling mode).