The Partnership for a New Generation of Vehicles (PNGV) is linking the research efforts of a broad spectrum of U.S. Federal agencies and laboratories with those of the domestic auto manufacturers in pursuit of three specific, interrelated goals: 1) reduce manufacturing production costs and product development times for all car and truck production; 2) pursue advanced technologies for near-term vehicle improvements that increase fuel efficiency and reduce emissions of standard vehicles; and 3) within the next decade, develop a new class of vehicle that will achieve up to three times the fuel efficiency of today's comparable vehicle, and, at the same time, cost no more to own and drive than today's automobile, maintain performance, size, and utility of comparable vehicles, and meet or exceed safety and emission requirements. This paper focuses on the potential role of alternative fuels in meeting the challenges faced by the PNGV in developing and implementing advanced technologies that are capable of meeting these goals.Hybrid vehicle and fuel cell technologies targeted by the PNGV are potentially capable of using alternative fuels such as natural gas, hydrogen, methanol, and ethanol. Of particular interest are fuel cells, which offer considerable fuel flexibility in addition to high efficiency, low or zero emissions, and low noise levels. They are also readily adaptable for use with natural gas, the most widely available non-petroleum-based fuel. Achieving PNGV goals will support national efforts to reduce the consumption of petroleum fuels and increase the use of clean, domestic, alternative fuels, which will lower transportation emissions and decrease the nation's dependence on imported petroleum.