This lecture covers the fundamental principle of thermodynamics, where entropy tends to increase, leading to relationships governing thermal, mechanical, and diffusion interactions. It explores the expression of entropy in quasi-static processes, calculating entropy changes, and implications of thermodynamic identities. The lecture also delves into thermal machines, such as the Carnot and Otto cycles, heat pumps, and refrigerators, discussing their efficiencies and performance. Various implications of thermodynamic identities are analyzed, including transformations at constant volume and isentropic processes. The lecture concludes with a comparison of different heating methods, emphasizing the efficiency of heat pumps over electric, fuel, and gas heating systems.