In this paper, a voltage drop compensation method for hybrid hydrogen fuel cell battery system, with a hydrogen recirculation powering a forklift, is studied. During recirculating hydrogen fuel to recycle hydrogen that has not reacted enough at the system, impurities can be mixed with the hydrogen fuel. This leads to low hydrogen concentration and a drop in the output voltage of the fuel cell system. In excessive voltage drop, the fuel cell system can be shutdown. This paper proposes a voltage drop compensation method using an electrical control algorithm to prevent system shutdown by reducing voltage drop. Technically, voltage drop is typically caused by three kinds of factors: (1) The amount of pure hydrogen supply; (2) the temperature of fuel cell stacks; and (3) the current density to catalysts of the fuel cell. The proposed compensation method detects voltage drop caused by those factors, and generates compensation signals for a controller of a DC–DC converter connecting to the output of the fuel cell stack; thus, the voltage drop is reduced by decreasing output current. At the time, insufficient output current to a load is supplied from the batteries. In this paper, voltage drop caused by the abovementioned three factors is analyzed, and the operating principle of the proposed compensation method is specified. To verify this operation and the feasibility of the proposed method, experiments are conducted by applying it to a 10 kW hybrid fuel cell battery system for a forklift.