To solve the pollutant emissions from a diesel engine, it seems quite effective to replace a diesel engine with a gasoline engine whose emission is less dirty. For this purpose it is required for a gasoline engine to improve the fuel consumption to the same level of a conventional diesel engine, so that the Miller system was applied to a gasoline engine. The Miller cycle gasoline engine equipped with rotary valves to control induced charge has an ability to vary the effective compression ratio, so that the better fuel economy is obtained due to the effects of both higher expansion ratio and decrease in pumping loss. 2.6 liter Miller cycle gasoline engine has a similar fuel consumption characteristic as the conventional 3.0 liter diesel engine. Although the output performance of the Miller cycle gasoline engine is inferior a little to that of the diesel engine, the emission characteristic of the Miller engine is far superior. Further, the ways to improve power output, fuel consumption and emissions characteristics are discussed.