In this paper we have proposed a novel gas turbine cycle with hydrogen-fueled chemical-looping combustion, and the system study on two hydrogen-fueled power plants, the new gas turbine cycle and an advanced gas turbine cycle with H-2/O-2 combustion, has been investigated with the aid of exergy principle (EUD methodology). The hydrogen fueled chemical-looping combustion in the new gas tur bine cycle consists of two successive reactions: hydrogen fuel is reacted with metal oxide (reduction of metal oxide), and then instead of air or pure oxygen, the reduced metal is successively oxidized by the saturated air. As a result, the new hydrogen-fueled gas turbine cycle has a breakthrough performance, with at least about 12 percentage-point higher efficiency compared to the gas turbine cycle with H-2/O-2 combustion, and will be environmentally superior due to complete elimination of NOx formation. The promising results obtained hen indicated that this novel gas turbine cycle with hydrogen-fueled chemical looping combustion could make a breakthrough in efficient use of hydrogen energy in power plants. (C) 2000 International Association for Hydrogen Energy. Published by Elsevier Science Ltd. All rights reserved.