A new efficient method of hydrogen, heat and aluminum oxide/hydroxide co-production is proposed. Only micron-sized aluminum powder (without any chemical activation) and usual water are used as initial reagents. For aluminum to be effectively oxidized, water is converted into the high-temperature boiling state that creates high pressure inside oxidation reactor. Paper describes the oxidation kinetics of aluminum micron powder in high-temperature boiling water depending on powder size and reactor temperature (pressure). Kinetic experiments were carried out using four types of aluminum powders with different dispersity. Due to kinetic experiments it was established that micron-sized aluminum powder intensively oxidizes in boiling water at temperatures above 230 degrees C. Aluminum powders with average particle size of 4.1 mu m, 7.2 mu m and 22.5 mu m were fully oxidized at 296 degrees C, 308 degrees C and 350 degrees C respectively. Aluminum powder with average particle size of 77.5 mu m after 10 min staying under about 364 degrees C was 95% oxidized. Reaction times for 4.1 mu m, 7.2 mu m and 22.5 mu m aluminum powders decreased from 870 s at 237 degrees C to 33 s at 359 degrees C, from 800 s at 273 degrees C to 41s at 355 degrees C and from 780 s at 286 degrees C to 66 s at 350 degrees C respectively. Aluminum oxidation product X-ray analysis showed that aluminum oxidized to aluminum hydroxide AlOOH - boehmite. Microstructure analysis showed that micronsized aluminum powder oxidation product represents nano-sized aluminum hydroxide. Copyright (C) 2011, Hydrogen Energy Publications, LLC. Published by Elsevier Ltd. All rights reserved.