In order to save energy and protect the environment, a high efficiency gas turbine cogeneration system has been proposed. The new technologies of two-stage combustion and steam addition are combined into this proposed system. Natural gas is used as a fuel. In this system, a key technology is to add a large quantity of steam to a gas turbine system that has two-stage combustor on the premise of flammable. It is thermodynamically proved that the turbine output is improved by steam addition. However, there is a risk to quench flame in the second stage combustion under the conditions of the low oxygen and high steam concentration. For application of this system, we have examined the combustion characteristics and NO. formation of two-stage combustion by means of experiments and numerical simulations using detailed chemical kinetics. The results provide data useful for establishing the optimal combustion conditions in this gas turbine cogeneration system.