This research was concerned with the use of Exhaust Gas Recirculation (EGR) improving the fuel economy over a wide operating range in a downsized boosted gasoline engine. The experiments were performed in a 1.3-Litre turbocharged PFI gasoline engine, equipped with a Low Pressure (LP) water-cooled EGR system. The operating conditions varied from 1500rpm to 4000rpm and BMEP from 2bar to 17bar. Meanwhile, the engine’s typical operating points in NEDC cycle were tested separately. The compression ratio was also changed from 9.5 to 10.5 to pursue a higher thermal efficiency. A pre-compressor throttle was used in the experiment working together with the EGR loop to keep enough EGR rate over a large area of the engine speed and load map. The results indicated that, combined with a higher compression ratio, the LP-EGR could help to reduce the BSFC by 9∼12% at high-load region and 3∼5% at low-load region. The fuel consumption reduction mechanisms were mainly attributed to heat loss reduction and lower pumping losses at low-to-moderate loads. During the high loads, the combustion phasing improvement combined with reducing fuel enrichment played a significant role to optimize the fuel efficiency, and the knock suppression effect was apparent.