A gas turbine engine that includes a compressor, a turbine, a heat exchanger, and a combustor. The compressor is mounted on a rotating shaft with at least one rotor with an inlet and an outlet, and at least one diffuser downstream from each rotor. The turbine includes at least one stator, and at least one rotor with an inlet and outlet located downstream of each stator, and mounted on the rotating shaft as the at least one of the compressor rotors. The inlet of the compressor rotor faces toward the outlet of the turbine rotor. The heat exchanger is configured to preheat the compressed air leaving the compressor by transferring heat from the turbine exhaust. The combustor can be configured for mixing fuel with the compressed air, either upstream or downstream from the heat exchanger, and further configured for igniting the preheated fuel/air mixture located downstream from the heat exchanger.