Numerical simulation of flow in an ejector-diffuser has been carried out for water-chilling application. A second throat ejector diffuser is the heart of this refrigeration system which creates a region of low (vacuum) pressure for cooling water evaporatively. To design the system and optimize its cooling performance, the effects of operating conditions and geometric parameters on vacuum suction pressure have been studied. The primary stream (air) entrains the secondary stream (water vapor) to create a low-pressure condition in the flash chamber. The primary supersonic flow needs to expand sufficiently to entrain the secondary stream and accelerate it to sonic velocity (secondary flow choking) in the throat section of the diffuser. A series of oblique shock cells will seal the low-pressure environment against ingress of atmospheric air and also help in gradual pressure recovery from the vacuum condition to ambient. The numerically predicted results have been validated with experimental data for the optimized geometry.