This paper describes the development of a microgasturbine with a rotor diameter of 20 mm. The target electrical power output lies around 1 kW. The total system fits in a cylinder with a diameter of 95 mm and a length of 120 mm. The system contains the same components as a large gasturbine generator: compressor, recuperator, combustion chamber, turbine, and electrical generator. Major challenges are the high rotational speed (500 000 r/min), high turbine inlet temperature (1200 K), and the efficiency of the components. Because of the small dimensions, the flow through compressor and turbine is characterized by relatively low Reynolds numbers. The higher flow losses and inherently lower efficiency require a higher blade tip speed (524 m/s) than for large turbines (300-400 m/s). To minimize wear and frictional losses, the rotor is mounted on aerodynamic bearings. To withstand the high centrifugal stresses, a high-strength steel is used for compressor and shaft. The turbine is made of a Si3N4-TiN ceramic composite to withstand the combination of elevated stress and temperature.