Self-Heat Recuperation Technology has recently been proved to be an effective method to cut the huge energy consumption in the chemical industry. In the present paper, the thermodynamic mechanism of the self-heat recuperative heat circulation of the vapour system without chemical reaction is studied in terms of exergy analysis using process module, temperature-entropy and energy conversion diagrams. The self-heat recuperative thermal vapour cycle process was modularized by combining four types of thermodynamic elementary process modules, namely isobaric heating and cooling process modules (heat receiver (HR) and heat transmitter (HT)) and isentropic compression and expansion process modules (work receiver (WR) and work transmitter (WT)), and a heat exchange process module (heat exchanger (HX)). In the four types of thermodynamic elementary process modules (HR, HT, WR, WT), both exergy and anergy are conserved. It is only in the heat exchange process module (HX) that exergy destruction takes place and the destructed exergy transforms into the same amount of anergy due to irreversibility of heat transfer. In the self-heat exchange process, the process fluid undergoes temperature change and phase transition. Therefore, the self-heat exchange process should be divided into three stages, namely the self-heat exchange of the liquid sensible heat, the self-heat exchange of the latent heat, the self-heat exchange of the vapour sensible heat. Correspondingly three HXs are necessary, and only in these three HXs do all the exergy destructions of the self-heat recuperative thermal vapour cycle process take place. The work provided as the minimum work required for the self-heat recuperative heat circulation of the vapour system by compressing the process fluid in the vapour phase through one WR, i.e. work input, equals the sum of the exergy required to compensate for the three exergy destructions of the three HXs and the exergy required to discard waste heat to the environment. The work input eventually converts to the waste heat, i.e. heat output, the exergy of which is the exergy required to discard the waste heat to the environment and the anergy of which results from the three exergy destructions of the three HXs.