This paper investigates the performance of a beta-configuration heat engine having a regenerative displacer. In the conventional beta-engine; the displacer and the power piston are incorporated in one cylinder. The displacer transfers the working fluid between expansion and compression spaces via the heater, the regenerator, and the cooler. In the present work, successive homogeneous layers of square wire meshes occupy the displacer space of a beta-engine that make the displacer to be a displacer and a regenerator simultaneously. The theoretical analysis of the engine is based mainly on Schmidt theory. The optimum dimensions of the heater, cooler, regenerator, piston stroke and displacer stroke as dimensionless ratios of the bore were found. The optimum phase angle between the piston and the displacer and the optimum ranges of the speed for each working gas were also found. In a comparison between the proposed engine which has a regenerative displacer and the GPU-3 engine which has a stationary regenerator and a solid displacer; it was found that; the proposed one delivers 20% more power with 10% more efficiency than the GPU-3 engine. (C) 2009 Elsevier Ltd. All rights reserved.