The growing need for electricity generation by the most efficient and environmentally acceptable routes predicts a promising future for a technology such as fuel cells which fulfill both requirements. With the use of fuel cells, the consumption of fuel, for the same amount of power generated, will be reduced substantially (20 – 40 per cent depending on the application). Several market surveys point to large early markets for fuel cells for both central station and dispersed power generation. In addition, low temperature fuel cells are prime candidates for transport applications because their efficiency is two to three times higher and emission of pollutants lower by two to four orders of magnitude compared with petrol or other internal combustion engines. Major types of fuel cells currently under development have been reviewed. Their performance characteristics, market segments and the current status of development has been discussed.