A single cylinder RDH spark ignition, gasoline engine operating at constant speed and load was used to study the effects of compression ratio, spark timing, exhaust gas recirculation (EGR) rate, and air/fuel (A/F) ratio on exhaust emissions, fuel economy and octane requirements. Analyses showed that fuel consumption decreased with increasing compression ratio at any given NOx emissions level, so that minimum fuel consumption was obtained at the highest compression ratio studied when basic engine HC emissions were not a constraint. However, if both HC and NOx emissions were constrained at constant low levels by optimal adjustments of EGR and spark timing, both the minimum fuel consumption and minimum octane number for trace knock were achieved at the lowest compression ratio studied. Furthermore, overall minimum fuel consumption at controlled HC and NOx levels was obtained at the leanest A/F ratio (15.4) studied. Therefore, these data indicate that the historically accepted improvement in engine efficiency with increasing compression ratio may not always be achieved when HC and NOx must be constrained due to emission requirements.