The U. S. Treasury Department recently ruled that the ethanol blenders tax credit applies to ethanol used to make ETBE for blending with gasoline. As a result, ETBE may soon become a popular gasoline blending component. Like MTBE, ETBE adds oxygen to the fuel while contributing to other performance properties of the gasoline.Phillips Petroleum Company has completed limited driveability and material compatibility studies on gasolines containing ETBE and has determined the effect on various performance parameters such as octane, volatility, and distillation of ETBE in gasoline. Levels of ETBE ranging from 0.0 to 23.5 volume percent (3.7 weight percent oxygen) in gasoline were included in the investigation. Use in gasoline is currently limited to only 12.7 volume percent (2.0 weight percent oxygen) by the gasoline substantially similar rule.No detrimental effects of the ETBE on metal or elastomeric parts common to gasoline delivery and fueling system were found. Also, several favorable blending properties of ETBE in gasoline are apparent as compared to either MTBE or ethanol. This paper presents details of these results.