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This paper presents a study of a cooled exhaust gas recirculation (EGR) system applied to a turbocharged gasoline engine for improving fuel economy. The use of a higher compression ratio and further engine downsizing have been examined in recent years as ways of improving the fuel efficiency of turbocharged gasoline engines. It is particularly important to improve fuel economy under high load conditions, especially in the turbocharged region. The key points for improving fuel economy in this region are to suppress knocking, reduce the exhaust temperature and increase the specific heat ratio. There are several varieties of cooled EGR systems such as low-pressure loop EGR (LP-EGR), high-pressure loop EGR (HP-EGR) and other systems. The LP-EGR system was chosen for the following reasons. It is possible to supply sufficient EGR under a comparatively highly turbocharged condition at low engine speed.