Free Piston Engine Linear Generator (FPEG) with features of thin and compact build, high efficiency and high fuel flexibility is developed. The FPEG consists of a two-stroke combustion chamber, a linear generator and a gas spring chamber. The key technologies to realize stable continuous operation are lubricating, cooling, and control logic.This paper proposes the original structure of the FPEG for enabling stable continuous operation. The main feature is a hollow circular step-shaped piston. The smaller-diameter side of the piston constitutes the combustion chamber, and the larger-diameter side constitutes the gas spring chamber. The larger cross-sectional area of the gas spring chamber leads to lower compression temperature of the gas spring chamber and consequently decreased heat loss. In addition, an oil cooling passage is built in the column stay, which ensures the enough cooling ability of the piston.To assess the performance of the proposed structure, one-dimensional cycle simulation was developed. In this simulations, spark ignition combustion (SI) and premixed charged compression ignition combustion (PCCI) were assessed. Output power of 10kW was obtained with both SI and PCCI combustion cases. In addition, high thermal efficiency of 42% was realized in the PCCI combustion case.As an experimental study, a FPEG prototype with a two-stroke SI combustion system was constructed. Stable operation of the prototype was achieved. Then the unique piston motion and its effect on combustion and power generation in the FPEG prototype were experimentally analyzed.