Abstract: A piston cylinder assembly is disclosed which may be used in new internal combustion engines of various types and which may be used to retrofit existing types of internal combustion engines so as to provide a high thermodynamic cycle efficiency and to substantially reduce the volume of pollutant gases exhausted from the engine. The assembly includes a piston having a centrally positioned generally circular first piston surface which is surrounded by a generally concentric annular second piston surface. The first and second piston surfaces are separated by an annular groove which accommodates a cylindrical wall of a cylinder assembly. The piston reciprocates in the fixed cylinder assembly and cooperates with the cylinder assembly to define an annular expansion/exhaust chamber. Reciprocably mounted with respect to the cylinder assembly is a movable head assembly which cooperates with the cylinder assembly and the piston to define a centrally disposed intake/compression chamber.