Abstract: An apparatus and method for converting thermal energy to mechanical energy utilizing a heat engine having a liquid working fluid which remains in liquid state in a closed fluid system throughout the entire cycle. The closed fluid system for the liquid working fluid includes a pair of double acting displacer cylinders (18, 20) in opposed cycling relation to each other and alternating between low pressure working fluid and high pressure working fluid. High temperature high pressure working fluid from a heat exchanger (12) including a plurality of thin heat transfer plates is provided alternately to the cylinders (18, 20) by the actuation of control valves (24, 28). The heat exchanger (12), a heater (14), and a cooler (16) are arranged between the control valves (24, 28) and the flow of low pressure working fluid and high pressure working fluid in adjacent paths through the heat exchanger (12) between the control valves (24, 28) is always in the same direction for each path.