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Feasibility studies concerning ethanol utilization in direct injection gasoline engines were conducted in order to clarify the effects of ethanol on engine performance, exhaust emissions and injector deposit formation. The investigation results indicate that E100 (100% ethanol fuel) can improve full load engine performance around whole engine speed range in a high compression ratio engine (ε=13:1), compared to that of a base compression ratio engine (ε=11.5:1) operated on a premium gasoline. This was caused by the volumetric efficiency (ηv) improvement and engine knock suppression in the high compression ratio engine. On the other hand, HC emissions remarkably increased under lower engine speeds at a full load condition. This phenomenon suggests that poor combustion occurred due to insufficient mixing of air and E100 fuel under these conditions, in which the amount of ethanol injected was too large and fluidity in the cylinder was weak.