A framework for creating thermal zones in a building for effective and efficient heating ventilation and air conditioning (HVAC) system design is introduced here. This method is based on simple “sort and eliminate” schemes and requires design cooling loads of conditioned spaces obtained from load calculation tools as primary input. The developed methodology is applied for creating thermal zones, determining corresponding supply conditions and ascertaining sizing of a dedicated outdoor air system (DOAS) with local recirculating units. A simulation study on a prototype-building model shows that a DOAS coupled with zoned recirculating systems that serve distinct thermal zones in a building (zoned model) perform comparatively better in controlling both space temperatures and humidity without significantly compromising HVAC energy and chiller loads than un-zoned HVAC systems serving the whole building as a single thermal block (un-zoned model). The consistency in the performance of zoned HVAC systems is verified by applying three different simulation weather files for New Delhi. Better performance along with logical and computational simplicity makes this design procedure a good alternative to traditional methodologies.