Abstract: A method is disclosed for determining the efficiency of a catalytic converter for reducing levels of carbon monoxide (CO) and hydrocarbons (HC) in an exhaust stream of an internal combustion engine including a closed-loop control system. The closed-loop control system is used to provide a signal to a fuel mixture-control device which delivers known levels of oxygen (O.sub.2) and carbon monoxide to the exhaust stream. The closed-loop control system is also used to externally control an air injection system which activates and deactivates the catalytic converter. A dilution factor is calculated and the catalytic converter efficiency is determined from the levels of carbon monoxide and hydrocarbons measured in the exhaust stream before and after the catalytic converter is activated by the air injection system.