High-dilution stratified EGR combustion system operating at stoichiometric air-fuel ratio (A/F) could offer significant fuel economy saving comparable to the lean burn or stratified charge direct injection SI engines, while still complies with stringent emission standards by using the conventional three-way catalytic converter. The most critical challenge is to keep substantial separation between EGR gas and air-fuel mixture, or to minimize the mixing between these two zones to an acceptable level for stable and complete combustion. Swirl-type stratified EGR and air-fuel flow structure is considered desirable for this purpose, because the circular engine cylinder tends to preserve the swirl motion and the axial piston movement has minimal effect on the flow structure swirling about the same axis. In this study, KIVA3V was used to simulate mixing and combustion processes in a typical pent-roof gasoline engine cylinder during compression and expansion strokes. Overall EGR rate, swirl ratios and directions of both air and EGR gas, and EGR amount mixed into the stoichiometric air-fuel mixture, were varied to understand critical issues in the processes and to find out the limitations. The effects of differences in velocity, temperature and density between the air and the EGR gas, turbulence intensity, and centrifugal force, on the mixing between the two zones were discussed. The simulation results demonstrated the expected benefits and feasibility of this high-dilution stratified EGR combustion system concept.