The design of the newly developed Toyota AZ series 4 cylinder engine has been optimized through both simulations and experiments to improve heat transfer, cooling water flow, vibration noise and other characteristics. The AZ engine was developed to achieve good power performance and significantly reduced vibration noise. The new engine meets the LEV regulations due to the improved combustion and optimized exhaust gas flow. A major reduction in friction has resulted in a significant improvement in fuel economy compared with conventional models. It also pioneered a newly developed resin gear drive balance shaft.