Micro gas turbine (MGT) is a promising technology for decentralized energy systems because of its wide range of benefits, such as fuel and operational flexibility, power density, combined heat and power efficiency, and lower emission levels as compared to its conventional counterparts. The stringent climate policies to overcome challenges caused by global warming demand significant measures including use of alternative fuels. Among low emission fuels, hydrogen might pose several challenges owing to its distinct chemical and physical properties. One of the potential challenges is the significant changes in exhaust gas fluid properties, such as relatively enhanced level of steam/moisture content in the flue gas. The varied exhaust gas fluid properties might generate both thermal stresses and considerable wet corrosion in the turbine section of gas turbine. This challenge becomes more susceptible in retrofitted gas turbines where combustor is replaced, while the rest of the turbomachinery remains same. Therefore, hot gas path components of gas turbines may face health degradation and subsequent performance deterioration and reduced lifetime. The aim of this paper is to compare the effect of injected corrosion faults on the thermodynamic performance deterioration of both H2 and natural gas (NG) fueled MGT. In this regard, this study first presents an experimentally validated simulation model of a 100 kW MGT using a commercially available software tool, GasTurb. The study compares the thermodynamic and combustion flue gas properties of both hydrogen and NG fueled MGT at full load conditions. The combustion reactions and detailed analysis of fluid flow properties manifested that H2 fuel utilization results in an increased steam content (by ~106) as compared to NG combustion. The combined effect of turbine corrosion severity level and high ambient temperature on the overall performance of the MGT is also studied. The study shows that the increased corrosion severity level at high ambient temperature can lead to deterioration in power and thermal efficiency. The findings of the present study might be helpful in designing new hot gas path components, and fuel accessories to upgrade the existing fleet of MGTs, while using hydrogen-rich fuels resulting in enhanced performance, and reliability. © 2023 American Society of Mechanical Engineers (ASME). All rights reserved.