The paper gives a general overview of the state-of-the-art in low heat rejection (LHR) engines. It also gives experimental results obtained at SwRI with a single-cylinder research engine using an electrically heated cylinder liner to simulate LHR operation and examine the effects of increased liner temperature. It was concluded that the improvement in fuel economy from LHR operation is negligible in naturally-aspirated (NA) engines, about 7 percent in turbocharged (TC) engines and about 15 percent in turbocompound (TCO) engines. LHR operation reduces power in NA engines only. It increases NOx emissions by around 15 percent, but reduces HC and CO emissions. LHR operation offers benefits in the reduction of noise and smoke, and in operation on low cetane fuels. Much more research is needed to overcome the practical problems before LHR engines can be put into production.