Advanced steam technology (sometimes known as modern steam) reflects an approach to the technical development of the steam engine intended for a wider variety of applications than has recently been the case. Particular attention has been given to endemic problems that led to the demise of steam power in small to medium-scale commercial applications: excessive pollution, maintenance costs, labour-intensive operation, low power/weight ratio, and low overall thermal efficiency.

Steam power has generally been superseded by the internal combustion engine or by electrical power drawn from an electrical grid. The only steam installations that are in widespread use are the highly efficient thermal power plants used for generating electricity on a large scale. In contrast, the proposed steam engines may be for stationary, road, rail, or marine use.

Although most references to "Modern Steam" apply to developments since the 1970s, certain aspects of advanced steam technology can be discerned throughout the 20th century, notably automatic boiler control along with rapid startup.

In 1922, Abner Doble developed an electro-mechanical system that reacted simultaneously to steam temperature and pressure, starting and stopping the feed pumps whilst igniting and cutting out the burner according to boiler pressure. The contraflow monotube boiler had a working pressure of 750–1,200 psi (5.17–8.27 MPa) but contained so little water in circulation as to present no risk of explosion. This type of boiler was continuously developed in the US, Britain and Germany throughout the 1930s and into the 1950s for use in cars, buses, trucks, railcars, shunting locomotives (US; switchers), a speedboat and, in 1933, a converted Travel Air 2000 biplane.

In the UK, Sentinel Waggon Works developed a vertical water-tube boiler running at 275 psi (1.90 MPa) which was used in road vehicles, shunting locomotives and railcars. Steam could be raised much more quickly than with a conventional locomotive boiler.

Trials of the Anderson condensing system took place on Britain's Southern Railway between 1930 and 1935. Condensing apparatuses have not been widely used on steam locomotives due to the additional complexity and weight, but they offer four potential advantages:

The Anderson condensing system uses a process known as mechanical vapor recompression. It was devised by a Glasgow marine engineer, Harry Percival Harvey Anderson. The theory was that, by removing around 600 of the 970 British thermal units present in each pound of steam (1400 of the 2260 kilojoules in each kilogram), it would be possible to return the exhaust steam to the boiler by a pump which would consume only 1–2% of the engine's power output. Between 1925 and 1927 Anderson, and another Glasgow engineer John McCullum (some sources give McCallum), conducted experiments on a stationary steam plant with encouraging results. A company, Steam Heat Conservation (SHC), was formed and a demonstration of Anderson's system was arranged at Surbiton Electricity Generating Station.

SHC was interested in applying the system to a railway locomotive and contacted Richard Maunsell of the Southern Railway. Maunsell requested that a controlled test be carried out at Surbiton and this was done about 1929. Maunsell's technical assistant, Harold Holcroft, was present and a fuel saving of 29% was recorded, compared to conventional atmospheric working. The Southern Railway converted SECR N class locomotive number A816 (later 1816 and 31816) to the Anderson system in 1930. The locomotive underwent trials and initial results were encouraging. After an uphill trial from Eastleigh to Litchfield Summit, Holcroft is reported as saying: