Abstract: An engine is constructed with a rotor housing having a rotor chamber formed in a cylindrical shape in the inside thereof and sealed at the opposing ends, such as by a cover at each end. At least one combustion chamber is provided which is coupled through the rotor chamber in one side thereof to provide a combustion space for a fuel mixture. A suction expansion valve is provided for opening and closing a passage directed into the combustion chamber and an intake pipe in the rotor chamber of the rotor housing. A compression exhaust valve is provided for opening and closing a passage directed into the combustion chamber and an exhaust pipe, in the rotor chamber of the rotor housing. A rotor is installed in an axial relationship within the rotor chamber of the rotor housing. The rotor includes at least one movable lug projecting therefrom. The movable lug is preferably formed on an outer circumference face of the rotor and performs suction. compression, expansion and exhaust strokes according to a cycle.