Abstract Introducing hydrogen as a future energy carrier an important condition is a high efficient and low cost process for hydrogen production. Total efficiencies of conventional water electrolysis plants are limited to 25–28% with respect to the primary heat necessary for power generation. Significant improvements of this efficiency can be achieved by steam electrolyzing at high temperatures. The thermodynamic advantages of this high-temperature electrolysis process are shown and the technological tasks of the required development work and the state of the art are described in detail. Significant improvements of the components for construction and interconnection of electrolysis cells have been achieved. Typical measured cell characteristics are adiabatic cell voltages of 1.3 V at 0.4 A/cm2 current density. Industrial engineering studies of the whole process have been performed indicating total efficiencies of about 40–50%, depending on the primary energy source.