This paper mainly studied the solid oxide fuel cell (SOFC)–micro gas turbine (MGT) hybrid power system. The key parameters that greatly influence the overall system performance have been studied and optimized. The thermodynamic potential of improving the hybrid system performance by integrating SOFC with the advanced thermal cycle system is analyzed. The optimization rules of main parameters of SOFC-MGT hybrid power system with the turbine inlet temperature (TIT) of MGT as a constraint condition are revealed. The research results show that TIT is a key parameter that limits the electrical efficiency of hybrid power system. With the increase of the cell number, both the power generation efficiency of the hybrid cycle power system and TIT increase. Regarding the hybrid system with the fixed cell number, in order to get a higher electrical efficiency, the operating temperature of SOFC should be enhanced as far as possible. However, the higher operating temperature will result in the higher TIT. Increasing of fuel utilization factor is an effective measure to improve the performance of hybrid system. At the same time, TIT increases slightly. Both the electrical efficiency of hybrid power system and TIT reduce with the increase of the ratio of steam to carbon. The achievements obtained from this paper will provide valuable information for further study on SOFC-MGT hybrid power system with high efficiency. Copyright © 2010 John Wiley & Sons, Ltd.