The compression ratio displays a dominant role in the performance of reciprocating I.C engine. All the methods to increase the power output bring along with them a host of various other problems. For instance, increasing engine speed imposes dynamic load factors and increased wear thereby reducing reliability and life. High turbo-charging results in very high peak pressures and also higher thermal loads. One method of solving high-pressure problem encountered when the specific output is increased is to reduce the compression ratio at full load but at the same time keep it sufficiently high for good starting and part load condition. Thus a fixed compression ratio engine cannot meet the requirements of high specific output and hence felt is the need for a variable compression ratio engine. The effect of compression ratio on brake thermal efficiency, CO & NOX are analyzed using Greaves MK20 SI Engine (2.28kW). The engine has a fixed compression ratio of 4.8, but the cylinder head has been modified to operate at compression ratios 3.6 to 7.4 in this project work. This engine has been used to investigate the effect of different fuels operating at three compression ratios of 4.0, 4.8 and 6.0.