A demonstration was performed to evaluate our proposal of a residential energy system based on fuel cells and energy networks of electricity, hot water, and hydrogen. The demonstration was conducted from April 2007 to March 2009 in a small apartment building constructed for experimental purposes in Osaka City. Three small proton exchange membrane fuel cells were installed, and the electricity and hot water from the fuel cells were shared among 6 units via an internal electricity grid and hot water pipe. A hydrogen production facility, a small storage device, and a hydrogen pipe were installed to supply hydrogen to the fuel cells. Six families went about their normal daily lives using this system. The energy flow from hydrogen production to consumption was demonstrated. The results of fuel cell operation, energy supply, and energy demand, as well as an analysis of primary energy saving and CO2 emission mitigation are presented. Copyright (C) 2011, Hydrogen Energy Publications, LLC. Published by Elsevier Ltd. All rights reserved.