Abstract: There is provided a high efficiency, medium output gas turbine engine which comprises at most three compressor stages, including one centrifugal compressor stage, all mounted on a common shaft for compressing inlet air, a combustion chamber for burning fuel in mixture with the compressed air to provide hot gases, output-power generating means operated responsive to the hot gases, an axial compressor-turbine driven by the hot gases exiting from the combustion chamber for driving an axial compressor integral with the axial compressor-turbine and constituting the final compressor stage, and a heat exchanger intercalated between the integral axial compressor/axial compressor-turbine unit and the output-power generating means. The heat exchanger is arranged to transfer heat from the hot gases leaving the axial compressor-turbine to the compressed air leaving the axial compressor.