Abstract: A two stroke compound engine has a pair of horizontally opposed piston cylinder assemblies extending along a common axis therein. Each piston cylinder assembly includes a piston, a combustion chamber and respective inlet and exhaust valves. A pair of connecting rods extending along the common axis connect the respective pistons to a crank extending from a rotary housing. The rotary housing is rotatably mounted within the engine and includes an output shaft extending co-axially therefrom. A fixed ring gear is mounted co-axially about the rotary housing along an axis extending perpendicularly to the common axis. A planetary gear mounted on the crank meshes with the ring gear for rotating the rotatable housing in response to reciprocation of the pistons. A pair of combustors are mounted on exhaust ports of the respective piston assemblies for further combusting exhaust from the combustion chambers by mixing exhaust with cooling air and additional fuel.