We provide a theoretical and practical model for the calculation of energy balance of free-living animals using the doubly labeled water method. Energy expenditure, metabolizable energy intake, and body energy balance (energy retention, negative or positive) of animals are estimated using CO2 production, water influx, and dietary habits. This model accounts for CO2 produced from the 1) oxidation of dietary substrates, 2) catabolism of body tissue, and 3) deposition of body energy. We examined the model using data from studies on five homeotherms reported in the literature. The ratios between daily energy expenditure using our model and that presented in the reports ranged between 0.76 and 1.18. Metabolizable energy intakes were as low as 43% of energy expenditure in negative energy-balanced hummingbirds and as high as 245% of energy expenditure in positive energy-balanced koala bears. This model is the first that allows theoretical calculation of all energy budget components, including energy retention, in free-living animals using the doubly labeled water method.