Apparatus and method for operating a fuel cell system including a hydrocarbon catalytic reformer and close-coupled fuel cell stack by recycling anode syngas into the reformer in a range between 60% and 95% of the total syngas. At equilibrium conditions, oxygen required for reforming of hydrocarbon fuel is derived from endothermically reformed water and carbon dioxide in the syngas. Reforming temperature is between about 650.degree. C. to 750.degree. C. The stack exit temperature is about 800.degree. C. to 880.degree. C. such that the required endotherm can be provided by the sensible heat of the recycled syngas. The stack has approximately equal anode and cathode gas flows in opposite directions, resulting in cooling from both the anodes and cathodes.