Abstract: An internal combustion engine having a cylinder, a piston reciprocally movable in the cylinder, the cylinder and piston defining in part a chamber for combustion, intake means for introducing air into the cylinder at predetermined intervals, exhaust means for removing combustion gases from the cylinder at predetermined intervals, and a regenerator liner in at least a part of the chamber, the liner having a structure with surfaces defining a plurality of regenerative cells constructed to cyclically admit, hold and discharge compressed air from the cylinder for thermally insulating the cylinder from the heat of combustion, the engine including a mechanism to maintain the piston displaced from the cylinder to avoid contact of the piston with the liner and including a positive displacement, rotary compressor-expander to precompress air delivered to the piston cylinder and receive combustion gases from the cylinder to drive the compressor-expander.