For handheld power tools, a four-stroke engine allows compliance with exhaust emissions regulations although four-stroke engines available tend to have unfavorable power to weight. The requirement for a low cost diecast block compromises valve sizes and port flow. While dynamic valve train limitations restrict maximum engine speeds. The use of a rotary valve as opposed to poppet valves avoids these issues and results in an engine with competitive performance. The engine block can be diecast and the engine can operate up to 14,000 rpm without valve related issues.This paper describes the evolution of a rotary valve concept and its application to two 35cc handheld development engines. The HRCV35 is based on a belt driven rotary valve horizontally mounted parallel to the crankshaft axis. The VRCV35 is based on a gear driven rotary valve vertically mounted on the cylinder axis. In both configurations, the rotary valve exposes inlet and exhaust ports providing unrestricted flow. The valve generates turbulence for easy starting and can operate on low volatility fuels such as aviation kerosene or JP8.Development of a competitive handheld engine requires a balance between; power, emissions, noise, weight, cost and durability. Prototypes for both configurations have been evaluated. The VRCV35 produces more power but is expected to have an unfavorable manufacturing cost. The HRCV35, considered more suitable for handheld applications, has been taken through performance and durability development. Compared to existing two-stroke and four-stroke engines; the HRCV35 shows competitive performance and potential advantages with starting and high rpm capability.