The exponential stability of the monotubular heat exchanger equation with boundary observation possessing a time delay and inner control was investigated. Firstly, the close-loop system was translated into an abstract Cauchy problem in the suitable state space. A uniformly bounded 0 -semigroup generated by the close-loop system, which implies that the unique solution of the system exists, was shown. Secondly, the spectrum configuration of the closed-loop system was analyzed and the eventual differentiability and the eventual compactness of the semigroup were shown by the resolvent estimates on some resolvent sets. This implies that the spectrum-determined growth assumption holds. Finally, a sufficient condition, which is related to the physical parameters in the system and is independent of the time delay, of the exponential stability of the closed-loop system was given.