A prototype of a small, spark-ignition free-piston engine combined with a linear alternator was designed to produce electric power for portable usage. It has a bore size of 25 mm and maximum stroke of 22 mm. The engine was fueled with liquefied petroleum gas consisting of 98% propane. The electric power generated by the linear alternator is a function of the piston dynamics and the electric conductance. Therefore, the purpose of current research is to investigate the effects of the basic engine controlling parameters such as the equivalence ratio of the mixture and the spark timing on the piston dynamics and study the relationship with the electric power generation performance. The equivalence ratio of the mixture was varied from 1.0 to 1.72, while the spark timing was varied at 3, 4, and 5 mm away from the maximum top dead center.Operating characteristics, namely, indicated mean effective pressure, electric power output, operating frequency and piston stroke were analyzed. The spark timing conditions of 4 mm showed the widest operation range in terms of conductance. The advanced spark timing condition of 5 mm was limited in continuous operation due to intermittent misfire. For the retarded spark timing condition of 3 mm, a larger portion of the combustion process took place during the late expansion stroke than under 4 mm conditions, so the indicated mean effective pressure was lower with the same mixture. Therefore, the spark timing of 4 mm resulted in longer stroke and higher frequency than the spark timing condition of 3 mm, which led to higher electric power output. As the conductance was increased, the operation frequency and the piston stroke decreased monotonically for both 3 and 4 mm spark timing conditions. However, the indicated mean effective pressure increased due to the longer scavenging period.Mass fraction burned analysis at the maximum power output condition for each spark timing was conducted to investigate the effect of the equivalence ratio on the combustion characteristics. The mixture with the equivalence ratio of 1.14 showed the shortest average combustion duration. Short combustion duration resulted in a higher indicated mean effective pressure, resulting in higher electric power output. The equivalence ratio of 1.14 and the spark timing of 4 mm were found to be the optimum condition for maximum electric power generation in current research.