Using an electric hybrid leads to a significant improvement in vehicle fuel economy. Unfortunately, it also leads to a substantial increase in cost. Regenerative compression braking offers another way to achieving the same objective without incurring the same cost penalty. With some modifications, the vehicle engine can perform both absorption and recovery of braking energy, using compressed air for energy storage. The process parallels the one employed by electric hybrids, but it requires none of the expensive electric equipment used in hybrid systems.This paper reviews basic principles of regenerative compression braking and its advantages in comparison to electric hybrid systems. It also describes the required changes in engine system and methods of control. Description and mathematical analysis of applicable thermodynamic cycles is given, including computations of cycle efficiencies and indicated mean effective pressures produced during braking and acceleration. Also included is analysis and calculation of the required volume of air-tank.