Improvement of warming performance is required for engine cooling system, because such improvement has an important role for lower emissions. However, the cooling performance and the warming performance of engine are related to the transactions. To improve such trade-off relation between the two performances, oil-cooled system was developed which components are simpler than conventional water-cooled system with a single cylinder, 339cc engine. The oil-cooled system has an “oil jacket” that closely encircles the combustion chamber to cool the cylinder head and cylinder sufficiently. This system adopts the engine lubrication oil to cool combustion chamber, thus the average temperature of the combustion chamber is higher than usual water-cooled engine that enables better warming performance. In addition, compared to usual air-cooled engine, this new developed oil-cooled system has no air-cooling fins on the cylinder head and cylinder that also improve the warming performance because of fewer aluminum volumes. The cooling performance of oil jacket, the effect of an elimination of air-cooling fins and warming performance of the oil-cooled system were confirmed at test bench. Test results show that there was slight decrease in output performance in the oil cooled-engine due to the difference of cooling performance, compared to the water-cooled engine. The time for warming operation was 20% shorter than water-cooled system. The improved warming performance of the oil-cooled engine also results in lower emission.