—In this paper, we explore the physical limits of suc-cessful information transfer in a point-to-point communication system. In interest of studying the fundamental limits imposed by physics on communication systems in general, we model a simple generic system that enables us to make some basic inquiries about the energy efficiency in information transfer and processing. We use ideas from thermodynamics such as Szilard engine to represent information bits. We further use ideas from electromagnetic theory for transfer of information, and information theory to define the energy efficiency metric. We find the upper limit of this efficiency and conditions at which it can be achieved.