Direct Injection (DI) is believed to be one of the key strategies for maximizing the thermal efficiency of Spark Ignition (SI) engines and meet the ever-tightening emissions regulations. This paper explores the use of Liquefied Petroleum Gas (LPG) liquid phase fuel in a 1.5 liter SI four cylinder gasoline engine with double over head camshafts, four valves per cylinder, and centrally located DI injector. The DI injector is a high pressure, fast actuating injector enabling precise multiple injections of the finely atomized fuel sprays. With DI technology, the injection timing can be set to avoid fuel bypassing the engine during valve overlap into the exhaust system prior to combustion. The fuel vaporization associated with DI reduces combustion chamber and charge temperatures, thereby reducing the tendency for knocking. Fuel atomization quality supports an efficient combustion process. Furthermore, the spray-guided combustion process has significant thermodynamic benefits over wall or air guided combustion resulting is near optimal combustion. Injection timings and compression ratio are optimized for best performances over Wide Open Throttle (WOT) conditions running homogeneous at stoichiometry or spray-guided stratified lean of stoichiometry. The paper also explores advantages of Jet Ignition (JI) versus standard SI in the lean spray-guided stratified mode of operation. Effects of fuel properties on gas exchange, mixture formation, in-cylinder charge cooling, wall-spray interactions, turbulent combustion evolution and knock occurrence are taken into account. Results are presented in terms of brake mean effective pressure, specific fuel consumption, efficiency and specific CO2 production showing significant improvements of LPG over gasoline for the reduced green house gas formation potential. This paper is a contribution to the development of a high efficiency gaseous fuel SI engine for the Australian market.