The purpose of this paper is to describe a novel liquid fuel conditioning process that is incorporated within a Wankel type rotary engine. The process takes place inside three small vaporization chambers attached to the engine rotor. After an injected liquid fuel has evaporated and superheated inside a vaporization chamber, it is transferred via a transfer port into a moving chamber near the middle of a compression phase to form a stratified mixture with a prevailing fresh air charge. Combustion is triggered by a spark. Near the end of an expansion phase hot combustion products enter the vaporization chamber via an entrapment port. Thereafter, those products are entrapped inside the vaporization chamber during about 180° of rotor rotation.Unlike spark ignition, compression ignition or homogeneous charge compression ignition engines, here the liquid fuel is injected into the vaporization chamber during the exhaust phase of a preceding cycle. Fuel droplets absorb heat from the hot entrapped combustion products and vaporization chamber walls, where they evaporate and reach a superheated gaseous state. Calculations predict that the residence time available inside a typical vaporization chamber of an engine running at 7,000 RPM is sufficient to evaporate and superheat diesel fuel droplets of 100 micron SMD.It is anticipated that this novel concept could substantially reduce the untreated emission levels of nitrogen oxides, carbon monoxide, particulate matter and unburned hydrocarbons when compared to contemporary Wankel type rotary engines. This projection implies that less costly and simpler after-treatment devices will suffice to comply with emission standard regulations.An improvement in engine fuel economy is expected because: (1) efficient and stable stratified combustion process, (2) unthrottled operation and (3) faster heat release rate than that corresponding to present-day Wankel type rotary engines.The moving chamber exhibits an over-elongated contour that develops while it is rotating around top dead center whose geometry allows running on much lower octane rated gasoline than a comparable piston engine. Also, because the fuel is vaporized, diesel knocking is prevented and therefore the fuel does not need to be rated for high-octane or cetane numbers. This feature allows the engine to efficiently employ gasoline or diesel fuels without additives or blends. Additionally, the system is expected to effectively utilize low-cost petroleum-derived fuel, biodiesel and vegetable oil.