In this study, analysis of the second law of thermodynamics is applied to the ladle furnace in an important alloyed and special steel production company in Turkey, Taking liquid steel and stack gas temperatures and production time of liquid steel in the ladle furnace into consideration, actual work, irreversibility and exergy efficiency have been calculated. In general, exergy efficiency is found to be 50%. Irreversibilities which cause the significant production costs are investigated in detail. (C) 2001 Elsevier Science Ltd, All rights reserved.