Abstract: A thermal transfer internal combustion engine with an air transfer cylinder located between a pair of power cylinders. The transfer cylinder has an intake valve and two transfer valves alternately feeding the two power cylinders. The power cylinders each contain a mono valve used for both intake and exhaust. Counter-flow manifolds connect the mono valves of the power cylinders to the transfer valves of the transfer cylinder. A regenerator with catalytic converter properties is located in each counter-flow manifold. The regenerator is heated by exhaust gases exiting the power cylinders, prior to exiting the engine through exhaust dump valves. Uncompressed intake air is pushed from the transfer cylinder through the regenerator where it is heated and delivered to the power cylinder for conventional processing. The heat recovery system provides high compression temperatures at low compression ratios, reducing engine fuel consumption.