An effective and simple method to improve the performance of a crankcase-scavenged two-stroke engine under off-design conditions is to reduce the fuel loss, due to short-circuiting, by controlling the pressure at the exhaust port. The present work presents a systematic study of the effect of throttling the exhaust pipe as a means of improving the torque, fuel consumption and emission in a two-stroke-cycle engine. The experimental observations were analyzed and extrapolated with the aid of a detailed computer program which simulates the engine cycle. It was concluded that: 1. The hydrocarbon emissions are significantly reduced when an exhaust contraction is applied. A reduction of 28% may be achieved at a wide range of engine speeds and loads, without a noticeable deterioration in die operation stability. 2. An optimum contraction ratio for HC emission has been observed and was found to be a complex function of the engine speed and load, but mainly dependent on the engine load. 3. The optimum contraction ratio for minimum fuel consumption is closely related to that for hydrocarbon emissions for the entire practical range of operation conditions. 4. The bsfc can be reduced by 15% - an amount which is correlated very well with the fuel loss through short-circuiting. 5. The maximum power of the engine may be increased by about 20%. This is attributed not only to the reduction in short circuiting, but also to the supercharging effect of throttling the exhaust pipe. 6. The cyclic dispersal has been dramatically reduced, in particular under low engine loads.