A direct injection stratified charge engine using New Mixture Formation Technology (OSKA) has been developed.Experiments on a single cylinder engine, with methanol and gasoline fuels showed the following results: 1) With methanol, the maximum IMEP was 1.3 MPa and the best indicated thermal efficiency was 46 %. 2) With gasoline, the maximum IMEP was 1.16 MPa and the best indicated thermal efficiency was 43 %.Analysis of the cylinder pressure diagram showed the following results: 1) High indicated thermal efficiency was observed by low time loss. 2) A relatively short combustion duration was observed even if the engine was operated with an overall lean fuel-air mixture in the part-load condition. This fact suggests that a stratified charge was attained. 3) From observation of the heat release rate,it will be predicted that combustion is characterized by flame propagation.