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The paper opens with a review and discussion of the basic principles of MHD power generation. It is seen that the MHD generator operates in a manner similar to that of a conventional generator in that the "armature" of the MHD is a hot, high-speed electrically-conducting gas, while the force or torque-required to move a metallic conductor through a field is replaced by a pressure gradient in the gaseous armature. Thus the functions of turbine and generator are combined in a single machine. Because this machine has no moving parts, it can, in principle, accept a working fluid at very high temperature. After a derivation of the basic MHD-generator flow equations a brief synopsis of losses in an MHD generator is given. The nature of these losses is such that the MHD generator is applicable where large amounts of power are involved. In gases, the Hall effect can be very pronounced, and its influence on MHD generator design and performance is pointed out. There follows a brief statement of the state of the art in MHD-generator development at the Avco-Everett Research Laboratory. It is shown that gases produced by conventional heat sources can be made adequate conductors of electricity for use in an MHD if a small amount of easily ionizable impurity called seed is added to the gas. Recent developments in superconducting materials, plus detailed studies of MHD-generator fluid mechanics in a large combustion-driven generator point to early realization of the potential of MHD.