This paper presents a novel concept of combining water injection process with an oxyfuel internal combustion engine cycle to enhance thermal efficiency. Since the emission of NOx is eliminated by using oxygen instead of air as oxidant, the exhaust gas is CO2-water vapor mixture, and CO2 is recovered through condensation of the exhaust gas at low cost. In this way, an ultra-low emission working cycle is achieved. The evaporation of injected water not only moderates the peak in-cylinder temperature, but also increases the mass of working gas inside the cylinder, therefore improves the thermal efficiency of the cycle. An ideal thermodynamic model combining an oxyfuel Otto cycle with water injection process was established to investigate the potential of the cycle thermal efficiency. Calculation results show that thermal efficiency reaches 53% when water injection temperature is 120 degrees C and 67% when water injection temperature reaches 200 degrees C. Moreover, bench tests were carried out on prototype engine based on this working cycle. Experimental results show that the thermal efficiency improves with the increase of both engine load and water injection mass, and indicated thermal efficiency increases from 32.1% to 41.5% under appropriate test condition. (C) 2014 Elsevier Ltd. All rights reserved.