Distributed generation (DG) with combined heat and power is considered as a promising solution to the deteriorating energy situation. However, the impact of DGs on air quality needs to be evaluated to meet federal and state regulations. Most regulatory air quality models, designed to estimate the impact of central power plants in rural areas, have difficulty in predicting the impact of DGs in more complex urban areas. A dispersion study took place in Palm Springs, California, in July 2008, to investigate DG's impact on urban environment. A 650 KW reciprocating generator is located in a typical southwestern urban setting. The tracer gas, SF6, was released from the stack of the DG, and ground-level concentrations were recorded at 48 tracer sampler locations during three day-time and four night-time sampling periods. Meteorological data including wind velocity, temperature, heat fluxes, and radiation were recorded by instruments on one tower in a parking lot and one tripod on the roof of the DG building. A scale-down urban setting of the DG and surrounding buildings was constructed in a laboratory water channel. The density and the flow rate of the buoyant plume were determined by geometric, kinematic, and buoyancy similarity between the field and the laboratory conditions. The buoyant plume rise was estimated from flow visualization using a colored dye. The velocity field was measured by the Particle Image Velocimetry (PIV), while the concentration field of a florescent dye was measured by the Planar Laser-Induced Florescence (PLIF). The comparison between the field measured and laboratory observed concentrations enabled validation of the laboratory settings. This allows for future investigation of the impact of DG and similar dispersion problems in an approach less expensive than field measurements.