A novel concept for a high efficiency reciprocating internal combustion engine (the isoengine) is described and its cycle is analysed. The highly turbocharged engine configuration, which is intended primarily for on-site and distributed power generation, has a predicted electrical output of 7.3 MW. It has the option for co-generation of up to 3.2 MW of hot water at 95 degreesC supply temperature. The maximum net electrical plant efficiency is predicted to be about 60% on diesel fuel and 58% on natural gas. The key to the high electrical efficiency is the quasi-isothermal compression of the combustion air in cylinders, which are separate from the power cylinders. This achieves a significant saving in compression work and allows the recovery of waste heat back into the cycle, mainly from the exhaust gas by means of a recuperator. The construction of a first 3 MWe Prototype isoengine has been completed and its testing has begun. Relevant test results are expected in the near future. (C) 2004 Elsevier Ltd. All rights reserved.