Tokyo Gas and Osaka Gas have been committed to addressing the energy-and environment-related issues of Japan through promotion of natural gas, an energy friendly to the environment. Being aware of the diversifying market needs (e.g. efficient energy utilization, rising demand for electricity, etc.), active efforts have been made in marketing gas-fired air-conditioning and co-generation systems. In this process, a high priority has also been placed on fuel cells, particularly for realizing their market introduction. Since their participation in the TARGET Program in USA in 1972, the two companies have been involved with the field testing and operation of phosphoric acid fuel cells (PAFCs), whose total capacity has amounted to 12.4 MW. The two companies have played a vital role in promoting and accelerating fuel cell development through the following means: (1) giving incentives to manufacturers through purchase of units and testing, (2) giving feedback on required specifications and technical problems in operation, and (3) verifying and realizing long-term operation utilizing their maintenance techniques. It has been expected that the primary goal of the cumulative operation time of 40000 h shall be achieved in the near future. Work has also been in progress to develop SOFC. In the joint R&D of a 25-kW solid oxide fuel cell (SOFC) with Westinghouse, the record operation time of 13000 h has been achieved. Though still twice as much as the average price of competing equipment, the commercialization of PAFCs is close at hand. By utilizing government spending and subsidies for field testing, work will be continued to verify reliability and durability of PAFCs installed at users＇ sites. These activities have been expected to contribute to realizing economically viable systems and enhance market introduction. The superlative advantages of fuel cells, particularly their environment-friendly qualities, should be best taken advantage of at an appropriate time. In order to achieve smooth introduction of fuel cells into the market, immediate action is seriously needed to re-examine the roles of users, manufacturers, and governments, thereby consolidating the efforts of the parties concerned in the most effective manner.