A new design concept of a boiling water reactor (BWR) fuel bundle for extended burnup was proposed to improve the capacity factor without increasing the fuel cycle cost. Some effects, which are raised from higher burnup, such as strong pellet-cladding interaction due to enhanced fuel swelling and changes in neutronic characteristics due to increased fuel enrichment, are minimized by a reduction in the maximum fuel temperature to below 1200°C and an increase in the moderator-to-fuel ratio. To realize these concepts, a 9 × 9 lattice design with a reduced fuel rod diameter and annular pellets was proposed. The proposed fuel bundle design offers advantages in fuel cycle improvements through extension of achievable burnup and reduction of fuel inventory. The core, loaded with the proposed fuel bundles which achieve 30% higher burnup by the full power month, has a potential for natural uranium savings of ∼20% per unit power and a reduction in the amount of reprocessing of ∼40% per unit power, compared with the current BWR design when coupled with other improvements such as refueling pattern optimization, natural uranium axial blankets, and spectral shift with flow control.