A program is being performed under the sponsorship of the United States Department of Energy, Office of Industrial Technology, to improve the performance of stationary gas turbines in cogeneration through the selective replacement of hot section components with ceramic parts. It is envisioned that the successful demonstration of ceramic gas turbine technology, and the systematic incorporation of ceramics in existing and future gas turbines will enable more efficient engine operation, resulting in significant fuel savings, increased output power, and reduced emissions. The engine selected for the program, the Centaur 50 (formerly named Centaur ‘H’) will be retrofitted with first stage ceramic blades, first stage ceramic nozzles, and a ceramic combustor liner. The engine hot section is being redesigned to adapt the ceramic parts to the existing metallic support structure. The program currently in Phase II focuses on detailed engine and component design, ceramic component fabrication, ceramic component testing, establishment of a long term materials property database, and the development and application of supporting technologies in the areas of life prediction and non-destructive evaluation. This paper outlines the design activities associated with the introduction of a ceramic first stage nozzle and two configurations of ceramic first stage turbine blade. In addition, probabilistic life assessment of the ceramic parts for major failure modes (fast fracture, slow crack growth and where relevant, creep and oxidation) will be discussed.