A method of operating an exhaust gas heat recovery (EGHR) system in a vehicle including an engine, a transmission, and an EGHR heat exchanger is provided. The method includes monitoring an engine water temperature and may include monitoring a transmission oil temperature and an ambient air temperature. The method includes comparing the monitored engine water temperature to one or more calibrated engine temperatures. Based upon the monitored temperatures and comparison to the calibrated temperatures, the method controls a two-way valve. The two-way valve is configured to be set to one of an engine position and a transmission position. The engine position allows heat-exchange communication between the EGHR heat exchanger and the engine, and the transmission position allows heat-exchange communication between the EGHR heat exchanger, the transmission, and the engine.
STATEMENT REGARDING FEDERALLY SPONSORED RESEARCH OR DEVELOPMENT
 This invention was made with U.S. Government support under Agreement No. PHEV DOE GMT311/166 awarded by the Department of Energy. The U.S. Government may have certain rights in this invention.