The use of current fuels to produce hydrogen on-board vehicles represents a good means to the gradual transition of terrestrial and naval transports for the "Hydrogen Society". The present work aims at the application of the MCFCs on-board large vessels, such as cruising, passengers or commercial ships, for auxiliary power generation purposes. A 500kW(e) auxiliary power unit (APU) plant based on a diesel oil processor integrated with MCFC stacks and a gas turbine was Considered. The two major key sections of the power system were the fuel processor unit (FPU) and the MCFC module, including an internal cooling exchanger via boiling water for the removal of the heat produced by the MCFC. Moreover, in the FPU there were the pre-reforming fuel clesulfurization system; a central heat generation unit, governing all the major heat requirements of the plant, together with a steam generator; and an ATR reformer with an embodied sulfur-refining trap. The APU system was modeled in steady state and coded in Matlab/Simulink as an aid to evaluate the heat recovery capability, system complexity and the overall APU efficiency, the latter defined as the ratio of the electric power generated to the potential power of the fuel rate (i.e., light diesel) fed to the APU. The system scheme was optimized by suitably integrating the FPU and the MCFC module to achieve the highest overall efficiency, evaluated as approximately 29%. Lastly, it was modified in a water self-sustaining combined heat and power (CHP) plant recovering from steam-rich exhaust gas streams the demi-water needed by FPU and producing at the same time sanitary/heating water for the ship; in this way, the evaluated overall power efficiency increased up to 77%. (C) 2008 International Association for Hydrogen Energy. Published by Elsevier Ltd. All rights reserved.