Thermodynamics is the key discipline for determining and quantifying the elements of advanced engine designs, which lead to high efficiency. In spite of its importance, thermodynamics is often not given full consideration in understanding engine operation for high efficiency. By fully utilizing the first and second laws of thermodynamics, detailed understanding of the engine features that provide for high efficiency may be determined. Of all the possible features that contribute to high efficiency, the results of this study show that highly diluted engines with high compression ratios provide the greatest impact for high efficiencies. Other important improvements, which increase the efficiency include reduced heat losses, optimal combustion phasing, reduced friction, and reduced combustion duration. Thermodynamic quantification of these concepts is provided. For one comparison, the brake thermal efficiency increased from about 34% for the conventional engine to about 48% for the engine with one set of the above features. One aspect that contributes to these improvements is the importance of the increase of the ratio of specific heats. In addition, these design features often result in low emissions due to the low combustion temperatures.