Abstract: Disclosed herein is a rotary engine operable as an internal combustion engine or powered from an external source, the engine comprising essentially three parts: (1) an outer housing or body, (2) a valve shaft extending axially through the body and having an eccentric mounted thereon, and (3) a rotor journalled on the eccentric. The shape of the internal surface of the housing and the rotor is such as to define a plurality of variable volume working chambers between the rotor and the housing. The rotor and internal surface of the housing may be cylindrical with the variable volume working chambers formed by sealing means projecting from the rotor in contact with the internal surface of the housing. The rotor and internal surface of the housing may also have a multi-lobed configuration with there being one less projecting lobe on the rotor than lobes in the housing with the projecting lobes of the rotor being essentially the same size and shape as those of the housing.