A new engine concept consisting of HCCI combustion for low and midrange loads and spark ignition combustion for high loads was introduced. The timing of the intake valve closing was adjusted to alter the negative valve overlap and effective compression ratio to provide suitable HCCI conditions. The effect of mixture formation on auto-ignition was also investigated using a direct injection engine. As a result, HCCI combustion was achieved with a relatively low compression ratio when the intake air was heated by internal EGR. The resulting combustion was at a high thermal efficiency, comparable to that of modern diesel engines, and produced almost no NO_x emissions or smoke. The mixture stratification increased the local A/F concentration, resulting in higher reactivity. A wide range of combustible A/F ratios was used to control the compression ignition timing. Photographs showed that the flame filled the entire chamber during combustion, reducing both emissions and fuel consumption.