An investigation of the effect of velocity/temperature boundary layers on the conductivity and the power output of an MHD generator has been presented in this paper; the analysis is based on the Boltzmann transfer equation. It is seen that the conductivity and the mean power output per unit volume of an MHD generator becomes considerably reduced because of the presence of the velocity and temperature boundary layers. The power output is found to decrease sharply with boundary‐layer thickness for low values of the thickness and levels off at larger thicknesses.