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Cummins Engine Company is developing a low heat rejection 450 kW engine under contract for the US Army Tank & Automotive Command. This paper discusses progress made toward achieving the program goals of 6.6 kcal/kW-min brake specific heat rejection and 200 g/kW-hr brake specific fuel consumption. Methodology for measuring heat rejection on a low heat rejection engine is presented. Design improvements of the base engine are discussed along with their effect on improving fuel consumption. Performance test data is assessed in terms of the first law energy balance and cooling load distribution. The heat rejection data provides insights on the performance of insulating components and two cooling system designs. Diesel cycle simulations are compared to the test data and are used to predict the effect of ceramic insulation on engine heat rejection.