Engineering foundation for micro-turbomachinery aerothermal design, as an enabling element of the MIT micro-gas turbine technology, is developed. Fundamental differences between conventional, large scale and micro turbomachinery operation are delineated and the implications on design are discussed. These differences are largely a consequence of low operating Reynolds number, hence a relatively higher skin friction and heat transfer rate. While the size of the micro-gas turbine engine is ∼ a few mm, several order of magnitude smaller than conventional gas turbine, the required compressor stage pressure ratio (∼3–4) and impeller tip Mach number (∼1 and greater) are comparable; however, the disparity in the size implies that the operating Reynolds number of the micro-turbomachiery components is correspondingly several order of magnitudes smaller. Thus the design and operating requirements for micro-turbomachinery are distinctly different from those of conventional turbomachinery used for propulsion and power generation. Important distinctions are summarized in the following. 1. The high surface-to-flow rate ratio has the consequence that the flow in micro-compressor flow path can no longer be taken as adiabatic; the performance penalty associated with heat addition to compressor flow path from turbine is a primary performance limiting factor. 2. Endwall torque on the flow can be significant compared to that from the impeller blade surfaces so that direct use of Euler Turbine Equation is no longer appropriate. 3. Losses in turbine nozzle guide vanes (NGVs) can be one order of magnitude higher than those in conventional sized nozzle guide vanes. 4. The high level of kinetic energy in the flow exiting the turbine rotor is a source of performance penalty, largely a consequence of geometrical constraints. It can be inferred from these distinctions that standard preliminary design procedures based on the Euler equation, the adiabatic assumption, the loss correlations for large Reynolds numbers, and the three-dimensional geometry, are inapplicable to micro-turbomachinery. The preliminary design procedure, therefore, must account for these important differences. Characterization of the effects of heat addition on compressor performance, modification of Euler turbine equation for casing torque, characterization of turbine NGV performance and turbine exhaust effects are presented.