Distributed generation (DG) is generally defined as the operation of many small stationary power generators throughout an urban air basin. Although DG has the potential to supply a significant portion of the increased power demands in California and the rest of the United States, it may lead to increased levels of in-basin pollutants and adversely impact urban air quality. This study focuses on two main objectives: (1) the systematic characterization of DG installation in urban air basins, and (2) the simulation of potential air quality impacts using a state-of-the-art three-dimensional computational model. A general and systematic approach is devised to construct five realistic and 21 spanning scenarios of DG implementation in the South Coast Air Basin (SoCAB) of California. Realistic scenarios reflect an anticipated level of DG deployment in the SoCAB by the year 2010. Spanning scenarios are developed to determine the potential impacts of unexpected outcomes. Realistic implementations of DG in the SoCAB result in small differences in ozone and particulate matter concentrations in the basin compared to the baseline simulations. The baseline accounts for population increase, but does not consider any future emissions control measures. Model results for spanning implementations with extra high DG market penetration show that domain-wide ozone peak concentrations increase significantly. Also, air quality impacts of spanning implementations when DG operate during a 6-h period are larger than when the same amount of emissions are introduced during a 24-h period