To exploit the regenerative gas-turbine cycle to the fullest possible extent requires an extremely high degree of heat exchange. Presently, the rotary heat exchanger is the only type which can be designed with the high thermal effectiveness necessary and yet remain practical from a size and cost standpoint. The mechanical nature of the rotary heat exchanger is such, however, that some leakage of high-pressure fluid to the low-pressure side will always occur. The fact that in the past this leakage could not be held to workable values has prevented commercial acceptance of this type unit. Consequently, The Air Preheater Corporation set up an intensive program aimed at developing an acceptable sealing means which would remove this one objection to an otherwise highly desirable piece of equipment. While this development program, at time of writing, is far from complete, results to-date have indicated that sealing of the rotary design can be accomplished, and based on quantity production, costs of a turbine plant equipped with a rotary heat exchanger would be attractive commercially. Included in the development program was the design and construction of a prototype unit for a 3000 hp turbine plant. While erection of the prototype unit is complete, no testing has been done at time of writing. The purpose of this paper is to emphasize the advantages of the regenerative cycle, generally, and more specifically, to show why the rotary type is most promising, particularly in the high effectiveness range. In addition, certain data pertaining to the design of the prototype unit are also presented. A future report will present results obtained from the prototype test program.