Gasoline-fueled small engines have been developed predominantly for power by using fuel-rich combustion, and unburned HC is usually a consequence of inadequate mixing and combustion of the charge. In principle, a straightforward way to reduce HC emissions is to run at an almost stoichiometric air-fuel ratio while NOx emission become problematic, namely a tradeoff exists between the amount of HC and NOx emission, especially at high engine loads. Cooled exhaust gas recirculation (EGR) is a common way to control in-cylinder NOx production when burning stoichiometric or even leaner mixture. In this paper, experimental investigations were conducted on a small off-road gasoline engine to study the effect of EGR system on the engine-out emission especially the unburned HC and NOx. The effect of different EGR rate on the engine power and emissions under various test operation points, especially high loads and main NOx emission contribution operations (using EPA testing method) were studied by controlling the EGR amount through EGR valve. Then the effect of mixture concentration on engine emissions was studied using 3 different AF ratio conditions. And the results show that NOx emissions decreased with increasing EGR percent while unburned HC is on the contrary. The effect on NOx emission reducing of EGR becomes weak with higher AF ratio mixture, and so does the effect on increasing HC emission. And minimized emissions can be achieved by optimizing lambda with EGR valve open compared with original engine.