The performance of an MHD generator utilizing plasma as working fluid has been assessed from the viewpoint of the second law of thermodynamics. The plasma flow in the generator linear duct has been solved by dividing the channel cross-section to an inviscid core region and the viscous boundary layers in the vicinity of the walls. The Hall effect has been taken into account and equilibrium ionization has been assumed. The dependence of the plasma properties such as Hall parameter, the coefficients of thermal and electrical conductivity, and viscosity on the plasma state has also been considered. Using the information obtained on the plasma behaviour in the generator, the entropy generation minimization approach is applied to improve the conversion efficiency. In addition to seeking the optimal working conditions, the nature of the irreversibilities occurring in the generator has been inspected and the relative importance of the phenomena of fluid friction, heat transfer and Ohmic dissipation and their contribution to the rate of destruction of useful available work has been compared. These studies reveal notable contrasts between the nature of irreversibilities in the liquid metal generators considered earlier and the more common plasma generators studied in the present work. (c) 2007 Elsevier Ltd. All rights reserved.