Today’s competitive market demands for low cost passenger cars with lighter, smaller size, peppy response and fuel efficient engines and having world class NVH refinement levels. For such requirements, it is essential to optimize the product starting from the design conceptual stage, considering all performance aspects.Generally, three cylinder engines, due to less reciprocating masses, compared to four-cylinder engine, are said to be fuel efficient for the same capacity. Nevertheless, NVH problems caused by inherent imbalance forces and couples remain as drawback of the three-cylinder engine. However, through optimal design of the crank train, control of cylinder to cylinder pressure variation, stiffening of the engine structure, optimizing the integration with a vehicle through proper design of mounts, NVH refinement levels can be improved.This paper describes the systematic approach used to optimize all the engine systems and components using the right combination of simulation and testing methods. At the early design stage, concepts were finalized based on simulations and estimations based on first principles. These concepts were engineered and further analyzed using advanced FEM techniques and computational 1D and 3D fluid dynamics tools. The key areas like intake system, timing drive system have been scrutinized and necessary improvements for respective components done through component manufactures. In the whole product development cycle, at various stages, NVH performance was validated and refinement levels were confirmed in terms of radiated noise, gear rattle, vibrations, ancillary noises, engine presence etc. Critical components were identified using advanced source identification techniques like sound intensity, modal performances and vehicle level NVH measurements. Finally, with hybrid approach used, helped to sign off the small engine with targeted NVH refinement performance level and implemented for production.The interdisciplinary efforts in the course of the development of the new naturally aspirated three-cylinder gasoline engine led to an aggregate with competitive NVH refinement levels without compromising on fuel efficiency and weight.