In recent years, fossil fuels such as petroleum, coal, and natural gas have become limited resources. In addition, bad effects caused by excessive carbon dioxide (CO 2) emissions have now begun destroying our global environment seriously. Since current living and economical standards depend strongly on fossil energy sources, it is necessary to realize a new society that utilizes biomass as a source of energy. In this background, in 2005, we manufactured a practical Stirling engine using woody biomass fuels for the first time in Japan. Further we proposed a unique co-generation system with the Stirling engine that uses woody biomass fuels such as sawdust, firewood, and wood pellets. In that co-generation system, a burner uses the woody biomass fuel to heat the air in the expansion room of the Stirling engine to about 650°C, and a water cooling system cools the air in the compression room of the engine to about 40°C. Under these operating conditions, the practical Stirling engine can generate about 3kW of electricity. In addition to the heat from the burner, which is easily recovered, the cooling water of the engine also provides useable heat. By use of simple heat exchangers, this heat can be used for domestic space heating and heating of greenhouses as well as supplying domestic hot water needs. This co-generation system utilizes up to 45% of the system-input energy in the form of electricity or heat. In this co-generation system, 43% of the input energy is wasted as heat loss from the exhaust smoke into the atmosphere. Therefore we tried to recover the waste heat by using a thermoelectric conversion module in this study. And also the performance of the Stirling cooler system using electric power based on woody biomass was tested. Due to the practical application of this combined utilization, a unique system in which both heating/cooling and power generation are available can be constructed.