Regeneration is the most efficient way of managing used oil. It saves money by preventing costly clean-ups and liabilities associated with mismanagement of used oil and it also helps to protect the environment. A numerical study of the flow, heat and mass transfer characteristics of the vertical evaporating tube with the films flowing down on both the inside and the outside tube surfaces has been carried out. Condensation occurs along the outside wall surface and evaporation at the free surface of the inside film. The calculation domain of two film flow regions and tube wall is solved simultaneously. The longitudinal variation of temperature, mass flow rate, and hence the thickness of the films downward the tube can be obtained by applying conservation of the energy requirement to the differential element.