An H-2 Polymer Electrolyte Membrane (PEM) Fuel Cell power generation system composed of three subsystems: fuel reforming, fuel cell stack, and post combustion is examined The system is simulated and optimized with a fuel cell model integrated within the process flow sheet. A case study optimization of the entire power generation system is presented and the influence of heat integration on the optimization is demonstrated. Our objectives are to maximize the energy and system efficiencies as well as the system profit. Here, optimization formulations with heat integration are used to realize our objectives, which explore the synergy between optimization and heat integration. Our results showed that we can achieve an energy efficiency as high as 58.30% and a system efficiency as high as 28.35%. For comparison, we provide results obtained from sequential process optimization followed by heat integration. The gain from the synergy is mostly exemplified in the profit maximization study, where the profit increases by almost 27.15% in the best case. Finally, we obtain optimization results that include feed vaporization of water to steam as a comparison for the heat integration. These results demonstrate the importance of simultaneous optimal heat integration for fuel cell-based processes. (c) 2006 American Institute of Chemical Engineers.