A unique engine, based on the regenerative principle, is being developed with the goal of achieving high brake efficiency over a wide power range. It can be characterized as an internal combustion Stirling engine (ICSE). The engine is a split-cycle configuration with a regenerator between the intake/compression cylinder and the power/exhaust cylinder. The regenerator acts as a counter-flow heat exchanger. During exhaust, the hot gases are cooled by the regenerator. The regenerator stores this heat. On the next cycle, compressed gases flow in the opposite direction and are heated by the regenerator. The gases coming from the regenerator into the power cylinder are very hot (~900°C), which provides the necessary gas temperature for auto-ignition of diesel and other fuels.A simplified Air Cycle analysis of the ICS engine is presented to validate the concept thermodynamics and to show the inherent difference between the ICS and conventional internal combustion engine (ICE) indicated efficiency. The ICE engine indicated efficiency increases with increasing compression ratio and is insensitive to peak temperatures, whereas in the ICS engine indicated efficiency increases with decreasing compression ratio and increasing peak temperature. This engine concept is a candidate for application of adiabatic engine technology which has been explored for many years. With materials that can withstand high temperatures, brake efficiencies of 60-70% are possible. Low heat transfer is important to the proper operation of the engine.A multi-step cycle computer indicated thermodynamic and fluid flow model of the ICS engine of increasing detail was used during the engine development. Finally, detailed perturbation studies were conducted to fully understand the ICS design sensitivities. An engine friction model was added to the computer model to be able to compare estimates of ICSE BSFC and BMEP with ICE engines.Important ICS engine innovations include elimination of throttling losses, low friction due to low compression ratio, and very high air cycle efficiencies (~80%) combined with low compression ratio. The engine is designed for the highest possible efficiencies. In addition to these advantages, the engine has nearly constant pressure combustion, which should help reduce NOx formation.The major findings were: the ICS engine is more efficient than either gasoline or diesel engines over the entire operating range especially at part power. At wide open throttle, an ICS engine is more efficient than either a gasoline or a diesel engine. This advantage increases at part power. On the negative side, the ICS engine has inherent low power density (volumetric efficiency) because of low compression ratio, late air intake and late combustion. A prototype engine and a modest engine test dynamometer and instrumentation are nearing completion to demonstrate the P&B Enterprises, Inc. (PBEI), ICSE concept. The prototype is a retrofitted two-cylinder diesel engine. The prototype uses the existing engine block, and the crankshaft and camshaft fit into existing spaces in the block. Anticipated problems to be addressed with the prototype engine are starting, combustion characteristics, regenerator temperature control and high turbocharging ratios to achieve reasonable power density.