A heat recovery unit (HRU) has been developed and implemented in a proton exchange membrane (PEM) fuel cell cogeneration system that generates electricity and hot water efficiently. It consists of a stack coolant circuit, a heat exchanger, and a heat recovery circuit. An intelligent thermal control algorism is proposed as well to manage the cogeneration system. The HRU together with the control scheme has managed the fuel cell cogeneration system properly and efficiently. The stack coolant inlet temperature (SCIT) is well controlled at the preset temperatures (55 degrees C and 59 degrees C) under different external loads (0-3 kW). Results also show that the dynamics of the SCIT is closely related to the actions of the secondary fluid pump. Up to 50% fuel energy can be recovered thermally in the present cogeneration system. Examination of the external-load effects reveals that increasing external loads increases the electrical efficiency but decreases the heat recovery efficiency slightly. The maximum efficiency as a combination of heat and power is 82% based on hydrogen's lower heating value. (C) 2010 Professor T. Nejat Veziroglu. Published by Elsevier Ltd. All rights reserved.