Early attempts to adapt the mechanism of the turbine to the air- or gas-engine were frustrated by the losses in the compressor, but in the last twenty years improvements in the efficiency of the latter, together with better high-temperature metals for the turbine, have enabled the gas turbine to approach the efficiency of the steam turbine. The gas turbine has to operate from a much higher temperature and with more effective high-temperature regeneration to achieve this. On the other hand it cannot utilize heat down to anything like the same lower temperature as steam power. Most regenerative gas-turbine cycles are therefore more efficient than the steam cycle at the upper temperature range, and less efficient at the lower temperature range. Now that the Rankine steam cycle has reached 1,000 deg. F., a given increment of temperature has much less effect on the steam turbine than on the gas turbine. The paper describes a condensing gas-turbine† cycle with external combustion, which utilizes orthodox gas-turbine and steam-turbine components in such a manner that the thermodynamic advantages of the two in the respective temperature ranges mentioned above are combined to give a higher thermal efficiency than either the steam or the gas turbine is capable of alone, and with the prospective ability to utilize almost any fuel. A great improvement may thus be made possible in the fuel economy of condensing steam power stations, steamship propulsion, and steam locomotives, and in the ratio of mechanical power to heat in combined power and process or district heat production. It may become commercially worth while, apart from the saving in coal, to eliminate a large proportion of condensing operation on land in the winter months. By integrating the fuel-using industries in this manner it should be possible to save at least fifty-million tons of coal per annum on the present aggregate output of power and heat, with a further saving of eleven-million tons of locomotive coal. This should enable the nation to afford much more liberal use of power and heat and thus achieve much greater production in transport and industry.