A team led by Solar Turbines Incorporated is conducting a three phase program under the sponsorship of the United States Department of Energy, Office of Industrial Technologies, to improve the performance of stationary gas turbines in cogeneration through the selective replacement of metallic hot section components with ceramic parts. Preliminary and concept design were completed in Phase I. Detailed design, component fabrication, and rig and engine testing are all being conducted in Phase II. Field engine testing will be performed in Phase III. This review summarizes progress on Phases II and III for the program for 1996. In 1996 the primary activities involved testing of uncooled first stage silicon nitride blades and SiC/SiC CFCC liners in a Centaur 50S engine modified to accept the ceramic components. Cumulative engine test experience by the end of November, 1996 has reached 52 hrs. The longest operating time on a single engine build at full load is 16 hours. Ceramic parts were also proof tested in rigs prior to engine testing. Preparations are currently underway for a 4,000 hour field test at the enhanced oil recovery site of ARCO Western Energy in Bakersfield, California.