The use of exhaust gases for creating dilute mixtures for internal combustion engines has been shown to play an important role for the development of high-efficiency engines. These exhaust gases may be recirculated with external piping, or they may be retained in the cylinder by altering the valve timings. A thermodynamic cycle simulation was used to determine the thermodynamic advantages and disadvantages of external and internal methods of providing the exhaust gases for an automotive engine at constant load and speed. For the external exhaust gas recirculation, four (4) levels of cooling were examined, and for the internal exhaust gas recirculation, the use of negative valve overlap and delayed exhaust valve closing were assessed. A measure of the total amount of recirculated and retained exhaust gases is the burned gas percentage. In general, the thermal efficiencies decreased for most of these methods as the burned gas percentage increased. These decreases were due to increased cylinder heat transfer (in spite of the decreases in the gas temperatures) which was due to increases in the convective heat transfer coefficient. For the highly cooled external exhaust gas recirculation configuration, a slight increase in the thermal efficiencies was obtained, but this level of cooling might not be practical.