An analytical model of a two-stroke cycle, reciprocating, compression ignition engine was used to investigate the ignition and combustion characteristics of coal/water slurry fuels. The engine cycle simulation was based on a thermodynamic analysis of the cylinder contents and consisted of models for the injection, ignition, combustion, mixing, heat transfer, work, and scavenging processes. The thermodynamic analysis resulted in a set of first-order nonlinear, ordinary differential equations which were numerically integrated to obtain instantaneous cylinder gas, droplet, and particle conditions. The simulation results were first compared to experimental data from a large, slow-speed (120 rpm) engine using a coal/water slurry fuel. Complete validation of the model was not possible due to the lack of detailed experimental data, but comparisons are presented which indicate general agreement between measured and computed values. The model was then used to predict the performance of an engine representative of a locomotive medium-speed engine. Engine and fuel parameters were varied to study their effect on ignition and combustion of the coal/water slurry fuel and on the indicated engine performance. Increases in the inlet air temperature improved the ignition and combustion characteristics. Lower equivalence ratios or smaller particle sizes resulted in higher thermal efficiencies. Also, higher reactive coal led to increased cylinder pressures and higher thermal efficiencies due to faster burning rates.