This paper deals with the development of new Stirling regenerator as one of parallel-geometry regenerators. Circular miniature-channels with different diameters, 1.5, 1.0, 0.6, 0.5, 0.4 (mm) were adopted for the current design. A 3D CFD approach, based on transient conjugate heat transfer was performed on a regenerator sector to obtain the fluid flow and heat transfer characteristics of each configuration. The obtained data was converted into an equivalent porous media to be utilized in a full CFD model of the engine developed by the author in other study. The results revealed that the 0.5 mm channel regenerator had good potential close to random fibre regenerator for maximizing engine indicated power. However, engine performance was adversely affected by the excessive heat rejected from the cooler due to the inherit axial conduction loss of channel regenerators compared to conventional regenerator. The results also showed that the proper selection of matrix material with high volumetric heat capacity and low thermal conductivity can alleviate these losses and reduce the heat rejected from the engine. This study suggested further experimental work to investigate the effect of channel regenerator segmentations to minimize the axial conduction losses and improve the regenerator performance. (C) 2016 Elsevier Ltd. All rights reserved.