A contrarotating propeller type propulsion system having first and second output rotary cylinders which are carried individually on an outside support cylinder fixedly secured to a first support structure, the first output rotary cylinder being borne on the outer peripheral surface of the first support cylinder through bearings and the second output rotary cylinder borne on the inner peripheral surface of the first support cylinder through bearings. The first and second output rotary cylinders serve to support the first and second contrarotating propellers, respectively. The first and second output rotary cylinders are supported on the first support cylinder at two axially spaced points. The driving shaft is borne on a second support cylinder fixedly secured to the support structure and surrounded by the first support cylinder. The gear reduction mechanism for causing the counter rotation of the propellers is provided within a case that is cooled and lubricated by oil flowing therethrough and also is cooled by an annular air passage around the entire exterior of the case.