Intercoolers utilized in turbocharged engines are critically essential to efficiently improve the engine volumetric efficiency and therefore the engine specific power. Although boosting the internal combustion engines has been extensively investigated, further studies are required to provide relevant approaches to optimize the heat transfer coefficient. This paper experimentally and theoretically investigates the influence of inlet coolant velocity on heat transfer characteristics of an air-to-water intercooler equipped in a turbocharged diesel engine. This aims to optimize the heat transfer rate from water to air under typical engine operating conditions. The experiment has been conducted using a fully equipped engine testbed. The engine is turbocharged with a plate-fin intercooler. The intercooler is a perpendicular air–water heat transfer system that could be suitable for boosted marine engines or power generators. A simulation model was also developed using the finite volume model in the ansysfluent package. The distributions of inlet and outlet temperature, pressure, and velocity of air and coolant under various inlet water velocity and engine operating conditions are examined. The optimal heat transfer rate from air to water was achieved for this intercooler. The outlet air temperature after the intercooler decreases by about 10 °C, engine thermal efficiency increases by 0.7% approximately, engine power enhances by 2.5%, and the specific fuel consumption decreases by 0.82%. The CFD simulation and experiment model developed in this study for the plate-fin water intercooler could be a useful approach to optimize other intercooler systems. In this study, with a 270 × 270 × 10 mm plate-fin perpendicular air–water intercooler, an optimal cooling water velocity of 1.0 m/s, corresponding with a flowrate of 1780 liter/hr, is achieved.