Method of combusting hydrocarbon fuel to form combustion products low in nitrogen dioxide (NO2) and carbon monoxide (CO) and mixing the combustion products with additional air to provide a heated air stream suitable for heating enclosed spaces includes the following steps: (a) delivering a fuel stream to a burner assembly; (b) delivering a combustion air stream to the burner assembly; (c) combining the fuel and air streams within a combustion chamber and heat exchanger wherein the mixture is ignited, completely combusted, and the temperature of the products of combustion are reduced; (d) providing tempering air to the external side of the combustion chamber and heat exchanger to transfer heat away from the combustion gases to tempering air; (e) combining the partially heated tempering air and cooled combustion products low in NO2 and CO; and (f) discharging the mixture into a space to be heated.