The U.S. Department of Energy (DOE) and the U.S. automotive industry are collaborating on research and development of advanced compression ignition direct injection (CIDI) engine technology and polymer electrolyte membrane (PEM) fuel cells for automotive applications. Under the auspices of the Partnership for a New Generation of Vehicles (PNGV), the partners are developing technologies to power an automobile that can achieve up to 80 miles per gallon (mpg), while meeting customer needs and all safety and emissions requirements. Research on enabling technologies for CIDI engines is focusing on advanced emissions control to meet the proposed stringent Environmental Protection Agency emissions standards for oxides of nitrogen (NOx) and particulate matter (PM) in 2004, while retaining the high efficiency and other traditional advantages of CIDI engines. DOE is teaming with U.S. diesel engine companies, catalyst manufacturers, and national laboratories to develop integrated emissions control systems. This paper will present emissions and efficiency data for several advanced diesel fuel alternatives when burned in a Daimler Benz Model OM 611 CIDI engine. Progress achieved in lean NOx catalyst and particulate trap emissions control systems will also be discussed. DOE and the automotive industry are also investing heavily in research and development of PEM fuel cells to meet the requirements of the PNGV. Two critical challenges facing fuel cell systems are addressing fuel processing issues including the removal of sulfur from fuel and lowering the overall cost of fuel cell systems. A cost estimate will be presented for a 50-kW PEM fuel cell system for automobiles based on technology available in year 2000. The high risk challenges facing the development of CIDI engine and PEM fuel cell technologies for the PNGV necessitate an active government role. This paper provides a status report on the PNGV program and an overview of the technical accomplishments and challenges facing the Advanced Combustion and Emission Control R&D and Fuel Cells for Transportation Programs of the Department of Energy.