Premixed combustion of hydrogen gas and air was performed in a stainless steel based micro-annular combustor for a micro-gas turbine system. Micro-scale combustion has proved to be stable in the micro-combustor with a gap of 2 mm. The operating range of the micro-combustor was measured, and the maximum excess air ratio is up to 4.5. The distribution of the outer wall temperature and the temperature of exhaust gas of the micro-conbustor with excess air ratio were obtained, and the wall temperature of the micro-combustor reaches its maximum value at the excess air ratio of 0.9 instead of 1 (stoichiometric ratio). The heat loss of the micro-combustor to the environment was calculated and even exceeds 70% of the total thermal power computed from the consumed hydrogen mass flow rate. Moreover, radiant hunt transfer covers a large fraction of the total heat loss. Measures used to reduce the heat loss were proposed to improve the thermal performance of the micro-combustor. The optimal operating status of the micro-combustor and micro-gas turbine is analyzed and proposed by analyzing the relationship of the temperature of the exhaust gas of the micro-combustor with thermal power and excess air ratio. The investigation of the thermal performance of the micro-combustor is helpful to design an improved microcombustor. (C) 2006 Elsevier Ltd. All rights reserved.