For μCHP applications, micro gas turbines offer many potential advantages in comparison to other conver- sion technologies due to their compact size and high specific power, low vibration and noise, low mainte- nance requirements, low emissions and high-grade residual thermal energy. Optimisation of MTT compressor with a vaneless diffuser (OCVLD) was performed to determine the signifi- cance of various geometrical parameters on MTT compressor performance. The blade angle at impeller inlet played a major role in reducing the performance of the MTT compressor followed with radius at inducer hub, radius at inducer tip and radius at impeller tip. Further increase in efficiency was observed by performing an optimisation of MTT compressor with a vaned diffuser (OCVD). However, incorporating optimised impeller design is not a cost effective option for MTT as a new compressor scroll has to be designed to accommodate the optimised impeller. The most cost effective option to increase the performance of the MTT compressor is by incorporating pre- whirl and vaned diffuser with existing turbocharger impeller. It was observed that, approx. 2.2% increase in electrical efficiency for MTT CHP unit can be achieved by incorporating a positive prewhirl and an airfoil shaped vaned diffuser. The recuperated micro gas turbine developed by the Dutch company Micro Turbine Technology B.V. (MTT) utilises offthe- shelf turbocharger impeller for their micro gas turbines to reduce manufacturing cost. How- ever, adopting the turbocharger impeller for micro gas turbine applications mostly results in operating the compressor at off-design conditions, thus reducing it’s performance. Improvement in micro gas turbine performance can be achieved by suitable modification of turbocharger technology, especially considering that turbochargers usually employ centrifugal compressor with a vaneless diffuser to minimise production cost and maximise flow range, whereas micro gas turbines require higher efficiency and pressure ratio for a confined operating range. Thus, the main objective of this thesis is to de- termine a cost effective option to increase the performance of the MTT Compressor. Form the 1D meanline results, it was observed that the incidence at the inlet of the impeller played a sig- nificant role in reducing the performance of the MTT compressor. The adoption of turbocharger impeller for MTT compressor was the primary reason for the reduction in MTT compressor performance. However, the losses due to incidence were mitigated at the expense of pressure ratio by providing a positive pre-whirl at impeller inlet. Significant increase in performance of MTT compressor was observed by replacing the vane- less diffuser with a vaned diffuser.