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Engine downsizing is one of the most promising alternatives for improving fuel economy, while maintaining good emission and NVH behavior. However, the development of a small displacement HSDI Diesel engine with 4-valve technology represents a significant challenge, especially with regard to the design of the top end. This paper summarizes the technical challenges that were overcome to incorporate product requirements for combustion behavior, NVH-performance, and production feasibility during the top end design of the new Ford 1.2 Liter HEV engine. This engine is a state-of-the-art HSDI Diesel engine which features a high pressure common rail fuel injection system, 4-valve cylinder head, cooled EGR, port deactivation, and variable nozzle turbocharger (VNT) technologies. Initial test results with the first prototypes of the 1.2 Liter DIATA engine verify that downsizing can successfully be performed.