Abstract: A gas turbine engine comprising a compression means, combustion means, a first turbine, and a second turbine is provided with improved thermal efficiency and power output through bypassing a portion of the engine operating fluid from a first engine position downstream of at least a portion of the compression means and upstream of a control area of the first turbine and injecting at least a portion of the bypassed flow downstream of the control area of the first turbine. High pressure steam is injected at a position between the engine position initiating the bypass and the engine position injecting the bypass into the fluid stream. The amount of steam injected is substantially equivalent in mass flow to the removed fluid.