A system and method in which a high temperature fuel cell stack exhaust stream is recycled back into the fuel inlet stream of the high temperature fuel cell stack. The recycled stream may be sent to a carbon dioxide separation device which separates carbon dioxide from the fuel exhaust stream. The carbon dioxide separation device may be a carbon dioxide trap, an electrochemical carbon dioxide separator, or a membrane separator. A water separator may be used in conjunction with the carbon dioxide separation device or used separately to continuously remove water from the recycled stream.