Downsizing of engines is becoming more popular as manufacturers toil for increased fuel economy. Due to the downsizing of engines, Brake Mean Effective Pressure (BMEP) tends to increase, which in turn increases the heat release from engine. This necessitates the need for optimizing cooling system in order to get higher engine output and lower emissions to comply with stringent emission norms. In earlier engines, thermo-siphon principle was used with water as the coolant. This has been replaced in modern engines with pressurized cooling system with coolants like ethylene glycol mix. Along with the conventional objective of increased material durability with the optimized engine cooling system, it has been found that there is an improvement in the engine output due to increased charging efficiency. This paper describes the effect of engine coolant temperature on performance, emission and efficiency of a three-cylinder naturally aspirated spark ignited engine. The engine was tested at different coolant temperatures and performance and emissions were measured. The effect of coolant temperature on the full-load motoring torque was measured so as to investigate the effect on engine friction.