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In the EU countries, almost 50% of the produced energy is used in residential buildings. More than 25% of this energy is used to produce domestic hot water, of which almost 80% is used to heat water in domestic hot water circulation systems. This is due to high expectations on the part of residents based on their comfort, in particular regarding the supply of heat for heating and domestic hot water. In the course of their long-term research conducted on real systems, the authors confirmed that the operation of domestic hot water distribution systems causes significant costs, mainly due to heat losses. Therefore, typical variants of energy optimization of such systems were analyzed. Tests have shown that selected solutions, such as the use of control automation, are not sufficient, and recommended additional thermal insulation may not be applicable due to technical reasons. With an aim of finding a solution to the problem, the publication analyzes operational data from an existing heat source and domestic hot water circulation system in a residential building. On the basis of these analyses, a solution was proposed to reduce energy consumption within the installation by means of its hydraulic optimization. The reduction of heat losses in domestic hot water installation by means of a method presented by the authors is estimated at approximately 20%. [ABSTRACT FROM AUTHOR]