This report summarizes the work performed to develop and verify the design of a prototype molten carbonate fuel cell stack which meets the requirements of a 1990's-competitive, coal-fired, electrical utility central station, or industrial cogeneration power plant. Matrix powder batches have been evaluated to determine the cause for particle surface area decrease during a preliminary heat treatment step. Analysis showed that LiAlO/sub 2/ hydration was the most probable cause. Evaluation of candidate separator plate and current collector alloys was continued. INCO 825 and 310SS continued to show the best corrosion resistance. Single cell testing to evaluate the corrosion resistance of 310SS under cell operating conditions was completed. Post test metallography is in progress. Additional cell testing was initiated to evaluate the ir loss of the candidate alloys. Single cell testing focused on evaluation of the dimensional stability of the present cathode structure, qualification of recently manufactured matrices, and a program to study the effects of cell operating conditions as NiO dissolution. The test of the 20-cell Subscale Stack No. 3 has been in progress for 3160 hours. Stack performance has remained stable through this reporting period. No decay attributable to electrolyte migration, end cell shorting, or stack compression has occurred. Components for Subscale Stack No. 4 are being fabricated. Completion of fabrication is expected on schedule. 32 figs., 39 tabs.