The invention relates to a multi-stroke variable displacement engine. A vehicle propulsion system and method of operation are presented. As one example, the method includes operating an engine to produce an engine output; transferring the engine output to one or more drive wheels of the vehicle via a transmission; responsive to a first condition, varying torque supplied to the drive wheels by adjusting a relative number of combusting cylinders and deactivated cylinders of the engine; and responsive to a second condition, varying the torque supplied to the drive wheels by adjusting a number of strokes performed by the combusting cylinders per combustion cycle while shifting the transmission between different gear ratios. By adopting the invention, power density can be enhanced thereby meeting required engine output, and the number of cylinder shifting between in-working state and non-working state can be further decreased.