Small-scale (100-500 kg H2/day) electrolysis is an important step in increasing the use of hydrogen as fuel. Until there is a large population of hydrogen fueled vehicles, the smaller production systems will be the most cost-effective. Performing conceptual designs and analyses in this size range enables identification of issues and/or opportunities for improvement in approach on the path to 1500 kg H2/day and larger systems. The objectives of this program are to establish the possible pathways to cost effective larger Proton Exchange Membrane (PEM) water electrolysis systems and to identify areas where future research and development efforts have the opportunity for the greatest impact in terms of capital cost reduction and efficiency improvements. System design and analysis was conducted to determine the overall electrolysis system component architecture and develop a life cycle cost estimate. A design trade study identified subsystem components and configurations based on the trade-offs between system efficiency, cost and lifetime. Laboratory testing of components was conducted to optimize performance and decrease cost, and this data was used as input to modeling of system performance and cost. PEM electrolysis has historically been burdened by high capital costs and lower efficiency than required for large-scale hydrogen production. This was known going into the program and solutions to these issues were the focus of the work. The program provided insights to significant cost reduction and efficiency improvement opportunities for PEM electrolysis. The work performed revealed many improvement ideas that when utilized together can make significant progress towards the technical and cost targets of the DOE program. The cell stack capital cost requires reduction to approximately 25% of todays technology. The pathway to achieve this is through part count reduction, use of thinner membranes, and catalyst loading reduction. Large-scale power supplies are available today that perform in a range of efficiencies, >95%, that are suitable for the overall operational goals. The balance of plant scales well both operationally and in terms of cost becoming a smaller portion of the overall cost equation as the systems get larger. Capital cost reduction of the cell stack power supplies is achievable by modifying the system configuration to have the cell stacks in electrical series driving up the DC bus voltage, thereby allowing the use of large-scale DC power supply technologies. The single power supply approach reduces cost. Elements of the cell stack cost reduction and efficiency improvement work performed in the early stage of the program is being continued in subsequent DOE sponsored programs and through internal investment by Proton. The results of the trade study of the 100 kg H2/day system have established a conceptual platform for design and development of a next generation electrolyzer for Proton. The advancements started by this program have the possibility of being realized in systems for the developing fueling markets in 2010 period.