An aspect of the present disclosure relates to a method and system for reducing emissions and improving knock-tolerance in an engine. Air, including exhaust gas present at levels greater than 20% by total air mass, may be introduced into a combustion chamber having a volume including a piston and a cylinder head. A first amount of fuel and a second amount of fuel may be directly injected into the combustion chamber at various points during the cycle, wherein the ratio of the air, including the exhaust gas, to the first and second amounts of fuel is 14.0:1 to 15.0:1. The first and second amounts of fuel may then be ignited. An electronic control unit may be utilized to time the injections and control the introduction of exhaust gas.