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We are developing a novel high-efficiency, high-temperature steam electrolyzer. Although water or steam electrolysis is well known to be one of the cleanest ways to produce hydrogen, widespread utilization is hindered by high operational costs because of high electricity consumption. To decrease the electrical power input requirements in electrolysis, our approach uses natural gas as an anode depolarizer. This approach essentially replaces one unit of electricity with one equivalent-energy unit of natural gas at much lower cost. The direct use of natural gas on the electrolyzer enables very high system efficiency with respect to primary energy. Experiments performed on single cells have shown a voltage reduction as much as 1 V when compared to conventional electrolyzers. System efficiency has been estimated to be 50 to 80%, depending on the electrolytic current. A 200-W prototype unit is being developed.