The aim of this experimental work was to improve understanding of the influence of hydrous ethanol on combustion in an engine demonstrating a tendency for biased flame migration towards the hotter exhaust walls as often reported for typical modem pent roof design IC engines. The work aimed to uncover the degree of residual water content that can be reasonably tolerated in terms of combustion characteristics in future ethanol SI engines (with the energy required to reduce water levels then potentially reduced). The experiments were performed in a single cylinder optical research engine equipped with a modern central direct injection combustion chamber and Bowditch type optical piston. Results were obtained under part-load engine operating conditions (selected to represent typical highway cruising conditions) with hydrous ethanol at 5%, 12% and 20% volume water. Baseline results were obtained using pure isooctane. High-speed cross-correlated particle image velocimetry was undertaken at 1500 rpm under motoring conditions with the intake plenum pressure set to 0.5 bar absolute. The horizontal imaging plane was fixed 10 mm below the combustion chamber "fire face". Comparisons were made to CFD computations of the in-cylinder flow. Complimentary flame images were obtained via the "natural light" (chemiluminescence) technique over multiple engine cycles. The flame images revealed the tendency of an iso-octane fueled flame to migrate towards the exhaust side of the combustion chamber, with no complimentary bulk air motion apparent in this area in the horizontal imaging plane. The faster-burning ethanol offset this tendency of the flame to migrate towards the hotter exhaust walls. The fastest combustion rate occurred with pure ethanol, with higher water content (> 5%) generally slowing down the flame speed rate to 10.64 m/s from 10.92 of ethanol and offsetting the flame speed/migration benefit (in good agreement with recent laminar burning velocity correlations for hydrous ethanol). When adding 20% water to ethanol the combustion rate was significantly slower (8.2 m/s) with a considerable increase in flame shape distortion as quantified by flame image shape factor values. The results demonstrate how the added water increases flame distortion and leads to higher flame centre displacement. Such flame centre displacement could potentially be offset in the future with a spark plug location biased further towards the intake side of the chamber (albeit sometimes practically constrained by the priorities given to intake valve sizing and local cooling jacket design). The results indicate that ethanol fuels offset such bias flame growth and allow residual water to be tolerated for an equivalent degree of biased flame migration. The implication is reduced fuel production energy and cost required to produce usable ethanol fuels.