Abstract: A compound engine having at least one internal combustion cylinder operating in a conventional manner, and an air or external combustion cylinder associated therewith. The external combustion cylinder operates according to the same cycle as the internal combustion cylinder, namely through consecutive intake, compression, expansion and exhaust strokes of the piston associated therewith. The charge taken by the external combustion engine is not fired and is caused to expand by transferring the heat of the exhaust gases from the internal combustion cylinder to the charge in the external combustion cylinder, at the end of the compression cycle thereof, so as to cause the gaseous fluid charge therein to expand to apply motive power to a driven output common to both the internal combustion cylinder and the external combustion cylinder.