The report was commissioned under the Hydrogen Implementing Agreement of the International Energy Agency (IEA) and examines the state of the art in the evolving field of hydrogen-fueled vehicles for road transport. The first phase surveys and analyzes developments since 1989, when a comprehensive review was last published. The report emphasizes the following: problems, especially backfiring, with internal combustion engines (ICEs); operational safety; hydrogen handling and on-board storage; and ongoing demonstration projects. Hydrogen vehicles are receiving much attention, especially at the research and development level. However, there has been a steady move during the past 5 years toward integral demonstrations of operable vehicles intended for public roads. Because they emit few, or no greenhouse gases, hydrogen vehicles are beginning to be taken seriously as a promising solution to the problems of urban air quality. Since the time the first draft of the report was prepared (mid-19 96), the 11th World Hydrogen Energy Conference took place in Stuttgart, Germany. This biennial conference can be regarded as a valid updating of the state of the art; therefore, the 1996 results are included in the current version. Sections of the report include: hydrogen production and distribution to urban users; on-board storage and refilling; vehicle power units and drives, and four appendices titled: 'Safety questions of hydrogen storage and use in vehicles', 'Performance of hydrogen fuel in internal production engines for road vehicles, 'Fuel cells for hydrogen vehicles', and 'Summaries of papers on hydrogen vehicles'. (refs., tabs.)