Ignition and combustion of methanol in a spark-assisted methanol diesel engine were studied for the purpose of developing such an engine that is practical for actual vehicles. It became clear through investigations on combustion of methanol in a spark-assisted methanol diesel engine that methanol combustion proceeds mainly by flame propagation. Based on this finding, effects of such parameters as the injection direction, ignition position, ignition energy, compression ratio, injection timing and ignition timing were studied to obtain optimal conditions for methanol combustion. It was found through such studies that it is effective to form the mixture upstream of the spark, plug relative to the swirling direction and increase the inductive component of the ignition energy to achieve a high ignition stability. It was also found that it is effective for raising the engine performance and improving exhaust emission characteristics to form the mixture downstream of the spark plug relative to the swirling direction so that the flame propagates along the swirl and to position the spark plug closer to the wall of combustion chamber so that the combustion is accelerated by the thermal mixing effect.The spark-assisted methanol diesel engine thus developed was mounted to a vehicle. The vehicle demonstrated superior fuel economy with very low levels of exhaust emissions.