This paper describes experimental work involving the direct-current electrolysis of potassium hydroxide solutions at medium temperatures (up to 80 degrees C) and atmospheric pressure. An electrolytic cell with a palladium silver alloy cathode as a source of ultrapure hydrogen was designed and tested. This cathode consists of a dense Pd-Ag tube capable to selectively separate hydrogen from other gases. Thin wall thickness (50 mu m) of the permeator tube permitted to attain high hydrogen permeation fluxes and high hydrogen yields. Starting from results, a prototype electrolyzer is designed. Copyright (C) 2011, Hydrogen Energy Publications, LLC. Published by Elsevier Ltd. All rights reserved.