Membrane distillation is a rate governed non isothermal membrane separation technique that utilizes trans-membrane temperature difference for evaporating the water and thereby separating it from brackish feed for reproducing fresh water. A novel design of a cylindrical air gap membrane distillation module is presented. The module is fabricated in a way similar to shell and tube heat exchanger. PTFE hydrophobic membrane is used and is formed in a cylindrical shape. Design of experiments (DOE) is used to design the experiments statistically and to identify the significant operating parameters. Experiments were performed according to the Taguchi design approach using L16 orthogonal array. Optimization of the whole process is performed by response surface methodology. It is shown that the feed temperature and feed flow rate have a positive effect, whereas the salinity has a negative impact on flux. The maximum value of flux achieved with this system is 3.6 kg/m2 hr. A high value of flux of 2.6 kg/m2 hr was achieved under optimum conditions at a temperature of 45 °C and a flow rate of 1.5 lpm with a salinity of 5 gm/liter.