''It's been brilliant,'' museum engineering team co-ordinator Tom Galletly said yesterday.
''The boiler is the heart of the place.
''When you came in the engine house before . . . it was cold and damp. There was just no life.
''We've got life back now . . . It's just warm and cozy and it's good.''
After the former oil-fired boiler failed its inspection last year, a new boiler was built in Christchurch, modelled on the previous unit.
Gasworks museum trust chairman Barry Clarke addressed more than 60 people at a function at the museum last night to celebrate the return of steam.
That restoration marked an important new phase for the museum, and he thanked the Dunedin City Council for a $40,000 interest-free loan to cover the costs of the new boiler.
He also praised Mr Galletly and other volunteers for their work in making the museum's new era of steam a reality.
There was growing acknowledgement of the museum's significance and it had recently been added to the Institution of Professional Engineers New Zealand heritage register.
