An internal combustion engine method and apparatus wherein most or all of the air compression required for combustion is done outside of the internal combustion engine and out of heat exchange contact with the combustion chamber. The engine includes direct regeneration of exhaust heat and the compressor includes means for varying the compression ratio thereof in response to various parameters such as throttle demand and ambient temperature. Fuel injection and/or carburetion are used in various combinations with the compressor, and pulsed compressed air is fed from the compressor into the combustion chamber in matched relationship to the position of the piston in the cylinder.