A conceptual study of two stage reusable launch vehicle powered by the liquid air cycle engine (LACE) is performed in this paper. The vehicle launches vertically and landing horizontally, and the booster flies back to launch site. The propulsion system of the booster is LACE/LRE combined cycle engine. To determine the performance of LACE mode, experimental and analytical studies of a compact heat exchanger for LACE is performed. A comparison between LACE powered booster with LRE powered booster, which using a common orbiter, is performed. It is found that the total weight of LACE booster becomes almost comparable with that of LRE system because of the increased structural mass for LH2 tank and also for liquefaction system. In this paper, we could not find clear advantages of using LACE boosters.