Hybrid electric vehicles (HEVs) are considered as the most commercial prospects new energy vehicles. Most HEVs have adopted Atkinson cycle engine as the main drive power. Atkinson cycle engine uses late intake valve closing (LIVC) to reduce pumping losses and compression work in part load operation. It can transform more heat energy to mechanical energy, improve engine thermal efficiency and decrease fuel consumption.In this paper, the investigations of Atkinson cycle converted from conventional Otto cycle gasoline engine have been carried out. First of all, high geometry compression ratio (CR) has been optimized through piston redesign from 10.5 to 13 in order to overcome the intrinsic drawback of Atkinson cycle in that combustion performance deteriorates due to the decline in the effective CR. Then, both intake and exhaust cam profile have been redesigned to meet the requirements of Atkinson cycle engine. Furthermore, the 1-D engine performance simulation software GT-power has been used to simulate engine performance at wide open throttle (WOT) operation condition. At last, the development Atkinson engine universal characteristics experiments have been conducted. Some parameters such as air fuel ratio (AFR), valve timing and ignition timing have been calibrated. The experiment results showed that Atkinson cycle engine’s whole fuel consumptions are much lower than that of Otto cycle engine, and the minimum brake specific fuel consumption (BSFC) is decreased from 250 g/(kW.h) to 234.5 g/(kW.h). Furthermore, the low fuel consumption area of Atkinson cycle engine is much wider than that of Otto cycle engine and the minimum fuel consumption area has been moved to low speed and low load operation conditions. It is conducive to the matching between engine and vehicle, that could effectively reduce the vehicle fuel consumption.