Pumped-thermal energy storage (PTES) systems consume and produce electrical energy using thermal storage media as an intermediate stage. PTES lends itself to long-duration energy storage to facilitate high penetration of intermittent electricity generation. This study presents a model-based comparison of two thermal storage types within a PTES system: a conventional, single-phase, stratified water-glycol sensible storage system (SGS), and an ideal isothermal, two-phase heat exchanger that freezes a water reservoir (isothermal heat exchanger (IHEX)). The SGS thermal storage capacity is based on the liquid’s sensible heat change with temperature, whereas the capacity of the IHEX is based on the latent heat of isothermally freezing and melting water. The idealized IHEX modeled here undergoes steady-state melting and freezing (in contrast to transient rates, as observed with ice-on-coil storage). A computational model of a complete PTES system is presented and used to evaluate the PTES system-level performance with each type of cold storage. Compared to SGS-based PTES, under nominal operating conditions, the IHEX-based PTES increased electrical round-trip efficiency from 61% to 82% and increased energy density from 1.13 to 8.09 kWh/m3 The performance of the PTES configured with IHEX storage was also analyzed under varying operating parameters.