Abstract: A heat engine and method of operation employing an alloy having a shape memory effect. A memory alloy element such as one or more wire loops are cyclically moved through a heat source, along a path toward a heat sink, through the heat sink and then along another path in counter-flow heat exchange relationship with the wire in the first path. The portion of the wire along the first path is caused to elongate to its trained length under minimum tension as it is cooled. The portion of the wire along the second path is caused to contract under maximum tension as it is heated. The resultant tension differential between the wires in the two paths is applied as a force through a distance to produce mechanical work. In one embodiment a first set of endless memory alloy wires are reeved in non-slip engagement between a pair of pulleys which are mounted for conjoint rotation within respective hot and cold reservoirs.