CO2 heat pumps have drawn a great deal of attention owing to their advantages of high efficiency and environmental friendly for heating water under low ambient temperature. However, the system performance is not desirable and shows a lower COP for space heating, especially for a radiator as heating terminal, due to the higher inlet water temperature at the gas cooler, which causes a large throttle loss when the refrigerant flow through the throttling device. To tackle this issue, a transcritical CO2 heat pump system integrated with thermal energy storage (TES) systems was developed in this paper. The heating performance of the proposed system was investigated using TRNSYS 17.0 based on a typical single family rural house located in Beijing, China. The results showed that the heating capacity and energy consumption decreased by 21 and 24%, respectively, and the heating seasonal performance factor (HSPF) of the proposed system increased by 4% in comparison with the baseline system (without TES) during the entire heating period. It has been proved that the proposed system showed a better performance for space heating with a radiator terminal at low ambient temperature.