The need for using alternative fuel sources continues to grow as industry looks towards enhancing energy security and lowering emissions levels. In order to capture the potential of these megatrends, this study focuses on the relationship between ignition energy, thermal efficiency, and combustion stability of a 0.5 L single cylinder engine powered by compressed natural gas (CNG) at steady state operation. The goal of the experiment was to increase ignition energy at fixed lambda values to look for gains in thermal efficiency. Secondly, a lambda sweep was performed with criteria of maintaining a 4% COVIMEP by increasing the ignition energy until an appropriate threshold for stable combustion was found. The engine performance was measured with a combustion analysis system (CAS), to understand the effects of thermal efficiency and combustion stability (COVIMEP). Emissions of the engine were measured with an FTIR. The engine was instrumented with visualization equipment to capture real-time combustion images. The results show that increasing the ignition energy will increase the thermal efficiency of combustion by roughly 2-3%. In areas of lean combustion, the ignition energy level plays a pronounced role in the COVIMEP of the engine. At λ = 1.25, drastic improvement of COVIMEP was realized based on increasing the energy level. Additionally, the reduction of NOx, CO, and THC emissions is possible as they also are sensitive to the amount of ignition energy.