The present invention relates to an air dryer (10) for a vehicle air system. The air dryer (10) includes a body (12) and a desiccant canister (14), the body (12) having an inlet (16) to receive air from an air source, an outlet (18) to supply air to a vehicle air system, a purge outlet and a regeneration inlet (24) to receive regenerative airflow from the vehicle air system. The body (12) is further provided with a chamber (28) containing a coalescer (38)positioned between the inlet (16) and the desiccant canister (14), and a bypass valve (34) positioned between the chamber (28) and the purge outlet. The coalescer (38) and bypass valve (34) are arranged such that during normal operation air entering through the inlet (16) passes through the coalescer (38) before reaching the desiccant canister (14) and during regeneration of the desiccant a portion of the regeneration flow passes through the coalescer (38) and the remainder of the regeneration flow bypasses the coalescer (38) through the bypass valve (34). The chamber (28) and coalescer (38) are fully provided within the air dryer body (12).