Recent advancements have demonstrated new combustion modes that exhibit low nitric oxide emissions and high thermal efficiencies. These new combustion modes involve various combinations of stratification, lean mixtures, high levels of EGR, multiple injections, variable valve timings, two fuels, and other such features. Although the exact combination of these features that provides the best design is not yet clear, the results (low emissions with high efficiencies) are of major interest. The current work is directed at determining some of the fundamental thermodynamic reasons for the relatively high efficiencies and to quantify these factors. Both the first and second laws are used in this assessment. An automotive engine (5.7 liter) which included some of the features mentioned above (e.g., high compression ratios, lean mixtures, and high EGR) was evaluated using a thermodynamic cycle simulation. These features were examined for two operating conditions: a moderate load, moderate speed condition (A), and a lower load, lower speed condition (B). By the use of lean operation, high EGR levels, high compression ratio and other features, the net indicated thermal efficiency increased from 35.6% to 48.2% (condition A), and from 30.3% to 44.6% (condition B). These increases are explained in a step-by-step fashion. One of the major reasons for these improvements was the lower heat losses associated with the advanced conditions. Other thermo-dynamic features are described.