Horizontal axis turbines are commonly used for harnessing renewable hydrokinetic energy, contained in marine and river currents. In order to encourage the expansion of electricity generation using micro-hydrokinetic turbines, several design improvements are investigated. Firstly, optimization-based design of rotor blade is used to get as close as possible to the efficiency limit of 59.3% (known as Betz limit), that counts for bare turbine rotors, placed in the free flow. Additional diffuser elements are further added to examine the potential to overcome the theoretical efficiency limit by accelerating water at the axial direction. Various diffuser geometrical configurations are investigated using the computational fluid dynamics (CFD) to obtain insight into hydrodynamics of augmented micro-hydrokinetic turbines. Moreover, the turbines are compared from the energy conversion efficiency point of view. The highest maximum power coefficient increase of 81% is obtained with brimmed (flanged) diffuser. Diffusers with foil-shaped cross-sections have also been analyzed but power augmentation is not significantly greater than in the case of simple cross-section designs of the same dimensions. The power coefficients’ comparison indicate that considerable power augmentation is achievable using brimmed diffuser with higher value of length-to-diameter ratio. However, the impact of diffuser length increase on the power coefficient enhancement becomes weaker as the length-to-diameter ratio reaches a value of 1.