In the scope of a research program carried out jointly by Volkswagen AG Research, Wolfsburg, and FEV Motoren-technik, Aachen, an advanced engine concept has been developed on the basis of a conventional engine. This concept makes it possible to vary the compression ratio over a useful range by means of an additional chamber in the cylinder head.Extensive investigations were carried out on an engine dynamometer in order to optimize the combustion process. The combustion process was analysed to quantify the losses incured by various engine and control parameters. This provided control criteria over the entire engine map, making it possible to adjust the compression ratio with respect to optimum efficiency and low emission levels.Final tests performed on a VW Rabbit with a variable compression ratio engine in the ECE and FTP 72 test cycles revealed up to 12% improvement in fuel economy compared to the standard vehicle. Due to the resulting leaner operation, NOx -emissions were reduced, whereas HC emissions were increased.