This paper reports on the development of key components, specifications, configuration and operating characteristics of a hydrogen-fueled portable power source with polymer electrolyte fuel cell (PEFC). A 1 kW class fuel cell module operating on an exclusive method of internal humidification was developed for the power source. A dc-ac inverter, in which a general-purpose integrated power module (IPM) was used as a switching device for microprocessor-based power conversion control, was developed to save the cost of generating de power output from the cell module. The power source supplies full power within 2 min from start-up, and is capable of generating rated 1 kW power for about 3 h and even longer if the cylinders are replaced. This power source has been confirmed to offer a high power generation efficiency of 30% or higher in overall output range, yielding good-quality power with little noise.