The continuing challenge to improve the quality of urban air, worldwide, provides many opportunities to introduce cleaner technologies into the industrial energy base. The fuel cell is particularly attractive from an environmental viewpoint because of its inherent efficiency, zero or near-zero emissions, and quiet operation. Since 1991, fuel cells have made major institutional strides in being recognized as part of the solution to the major air-pollution problem in Southern California. Fuel cells and hydrogen are now receiving greater attention in the regulatory planning process. This process seeks to identify lower-emitting technologies and fuels that can assist the region in meeting health-based air-quality standards by the year 2010, and provide for a sustainable, health-grounded regional economy as well. Current demonstration projects involving fuel cells and hydrogen are discussed, as well as necessary plans and incentives for infrastructure development - a critical component of fuel-cell commercialization. Finally, an overview is presented of regulatory efforts that are being considered to support early markets for fuel cells.