Automobile OEM's around the world are looking to improve their overall vehicle and engine efficiency in terms of fuel economy and power output. Efficiency improvement is possible by cutting down the engine parasitic loads. One such parasitic load is the oil pump, which lubricates the engine parts. Oil pump is the heart of an engine lubrication system, and its important functions are cooling and lubricating the engine moving parts by delivering adequate oil flow based on the engine demand. Insufficient or no oil delivery from the oil pump leads to the seizure of the engine.The internal vane type oil pump is one kind of positive displacement type pump, where oil gets transferred from the oil sump into the inlet volume. The negative pressure is created inside the pumping chamber due to increase in area. As the vane rotates eccentrically with respect to the stator, it delivers the oil at a higher pressure from inlet to outlet and supplies to engine gallery through the discharge port.The vane type oil pump, being a positive displacement pump and has an output characteristic approximately linear with speed. This leads to more flow rates at higher speeds than the engine demand. This “waste oil” is conventionally discharged through a regulating valve at high a pressure resulting in loss of energy (useful work transferred to heat). This limitation of conventional pump has led us to look for alternative means by which the loss of useful energy could be minimized. One of the solutions is to have a mechanism, by which the eccentricity can be varied, thereby restricting the amount of oil that is pressurized, thus reducing the loss of energy. This concept is popularly known as variable displacement. With the internal vane type design, modifications can be made to achieve variable displacement meeting the engine demand, at all speeds without excess flow rates at higher speeds. Design and development of such a pump, to meet the requirement of a mulijet diesel engine used in a passenger car are presented.