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This paper describes the first phase of a project to develop a medium duty engine to run on compressed natural gas (CNG) as an alternative fuel for vehicles such as school buses and medium trucks. The engine uses a lean burn, open chamber design featuring the Nebula combustion system. Mechanical air-fuel ratio control and a mapped high energy ignition system, combined with a wastegated turbocharger, will contribute to the low emissions. The CNG engine will have the maximum commonality with the existing diesel engine and will use the same production tooling wherever possible. The initial build of CNG engine is intended to avoid the expense and complication of an intercooler and catalyst. Future potential for even lower emissions and higher pressure could be achieved by the use of electronic air-fuel ratio control and the addition of intercooling and an oxidation catalyst.