A fuel cell system has a fuel cell disposed within a fuel cell enclosure for electrochemically combining externally supplied oxygen with hydrogen to produce direct-current electrical energy and water as a reaction product. A hydrogen-containing fuel such as a chemical hydride contained within a fuel container receives the by-product water and reacts therewith to produce hydrogen, which is supplied to the fuel cell to sustain operation thereof without need of adding externally supplied hydrogen. The integration of the supply of hydrogen with the fuel cell results in a weight and volume reduction as well as internal chemical control of the production of hydrogen to sustain the electrical power generation and internal water management whereby liquid water emission is substantially reduced.