A prototype machine for a next generation microturbine system incorporating a simplified humid air turbine cycle has been developed for laboratory evaluation. Design targets of electrical output were 150 kW and of electrical efficiency, 35% LHV. The main feature of this microturbine system was utilization of water for improved electrical output, as lubricant for bearings and as coolant for the cooling system of the generator and the power conversion system Design specifications without WAC (Water Atomizing inlet air Cooling) and HAT (Humid Air Turbine) were rated output of 129 kW and efficiency of 32.5% LHV. Performance tests without WAC and HAT were done successfully. Electrical output of 135 kW with an efficiency of more than 33% was obtained in the rated load test. Operation tests for WAC and HAT were carried out under the partial load condition as preliminary tests. Water flow rates of WAC were about 0.43 weight % of inlet air flow rate of the compressor and of HAT, about 2.0 weight %. Effects of WAC and HAT were promptly reflected on electrical output power. Electrical outputs were increased 6 kW by WAC and 11kW by HAT, and efficiencies were increased 1.0 pt % by WAC and 2.0 pt % by HAT. Results of WAC and HAT performance tests showed significant effects on the electrical efficiency with an increase of 3.0 point % and electrical output with an increase of 20% by supplying just 2.4 weight % water as the inlet air flow rate of the compressor.Copyright © 2007 by ASME