On the basis of synergetic integration of an externally fired humid air turbine (EFHAT) cycle and effective recovery of latent heat from the exhaust gas of gas turbine, we have proposed a new type of EFHAT power generation system with effective utilization of latent heat, different from traditional EFHAT system. Due to use of clean humid air as working substance, latent heat can be recovered and utilized to generate hot water for the humidifier. This will enhance the humidification ability, giving rise to performance improvement of the system. As a result, at the turbine inlet temperature of 1123 K, the thermal efficiency of this new system may be expected to be as high as 47-48%. Additionally, we obtained the analytical expressions of system performance, and disclosed the relative relationship of system efficiency between the new EFHAT system and the pure externally fired power system. Copyright (c) 2005 John Wiley & Sons, Ltd.