HFC-161 is being considered as an alternative to HCFC-22 in air conditioner. Thermo physical properties of HFC-161 are closer to HCFC-22. The flammability of HFC-161 needs to be addressed while using in air conditioner. A typical split packaged air conditioner with nominal cooling capacity of 5.2 kW that was originally designed for HCFC-22 was selected for performance evaluation in psychrometric chamber. Test conditions considered are as per IS 1391 part 1. Air conditioner performance was evaluated for capacity rating test conditions. Initially, baseline performance was established with HCFC-22. Then HFC-161 was used as drop-in for HCFC-22. Under drop-in test, the cooling capacity of HFC-161 was 10.1 % lower than that of HCFC-22 and EER was 19.7% higher compared to HCFC-22. The optimized HFC-161 charge under drop-in was 385g. This was 51% of HCFC-22. In order to achieve equivalent cooling capacity of HCFC-22, modified capillary was considered in another test. In this test, HFC-161 gave 7.1% lower cooling capacity and 17.7% higher EER than that of HCFC-22.