An improved transfer matrix method which has been proposed by the author is applied to the isotropic Heisenberg chain with spin 1/2. Both ferro- and antiferromagnetic couplings are considered. We first explain how to find the size of transfer matrix in consideration of the symmetry of Trotter subsystem with Trotter number M. We then compute the internal energy, specific heat, magnetization and susceptibility in the presence as well as absence of magnetic field in the cases of the pair and tri spin decompositions with M=2, 4 and 6. Our results are qualitatively explained on the basis of the level schemes of the clusters of decomposition. We find good and rapid convergence to the infinite chain limit of Bonner and Fisher with increasing Trotter number in the tri spin decomposition except at very low temperatures, when we examine the zero field limit. Convergence with Trotter number in the case of finite field is also rapid in either decomposition. However there are interesting discrepancies, though small, between the results of Bonner and Fisher and ours in the tri spin decomposition, which remain as one of future problems to be investigated. Finally we present brief discussion about strategy and tactics for getting improved results by our method.