The aircraft, known as HY4, took off from Slovenia on four low-altitude test flights carrying a hydrogen fuel tank made by French company Air Liquide.
German operator H2Fly believes the four-seater plane could fly about 1,500 kilometres, a short-haul flight about the distance from London to Rome. One of its test flights lasted three hours.
Longer flights are limited by the large volume of hydrogen that would be needed, and the low-carbon fuel is currently expensive to use.
But the industry is looking at hydrogen as one way to reduce its carbon emissions alongside synthetic fuels and small battery-powered aircraft.
The H2Fly test aircraft, which took off from Maribor, north-east Slovenia, has an engine that converts liquid hydrogen into electricity.
This was “safe and efficient”, the company said on Thursday.
“This achievement marks a watershed moment in the use of hydrogen to power aircraft,” said H2Fly's founder Josef Kallo.
“We are now looking ahead to scaling up our technology for regional aircraft and other applications, beginning the critical mission of decarbonising commercial aviation.”
Hydrogen produces only water vapour – rather than carbon dioxide – when it is burnt in a fuel cell.
It first has to be hived off from water. Only if this is done in a low-carbon way is it known as green hydrogen. Aviation accounts for about two per cent of global carbon dioxide emissions.
H2Fly, which is owned by US company Joby Aviation, said tests had shown liquid hydrogen doubled the aircraft's range compared to storing it as pressurised gas.
Liquid hydrogen has to be cooled to below minus 250°C.
The German company now wants to enter the commercial market by developing an engine for altitudes of more than 8,000m.
Pierre Crespi, Air Liquide director of innovation, said the flight test “demonstrates the full potential of liquid hydrogen for aviation”.
“Hydrogen is key to the energy transition and this new step proves that it’s already becoming a reality,” he said.