Abstract: A highly efficient regenerative reciprocating internal combustion engine is disclosed. The regenerator captures the unutilized heat normally expelled with the exhaust products of such an engine and transfers it to fresh working fluid at the appropriate time in the next engine operating cycle to reduce the quantity of fuel which must be burned, resulting in an increase in engine efficiency. This is accomplished through the use of a permeable, movable heat exchanger located between the piston and the cylinder head. This regenerative technique can be applied to both two and four stroke Diesel cycle and Otto cycle engines. It can also be employed in ported (i.e. valveless) engines. The hot combustion region can be located between the cylinder head and the regenerator or between the piston and the regenerator.