Natural gas is a promising alternative fuel for internal combustion engines because of its clean combustion characteristics and abundant reserves. However, it has several disadvantages due to its low energy density and low thermal efficiency at low loads. Thus, to assist efforts to improve the thermal efficiency of spark-ignited (SI) engines operating on natural gas and to minimize test procedures, a numerical simulation model was developed to predict and optimize the performance of a turbocharged test engine, considering flame propagation, occurrence of knock and ignition timing. The numerical results correlate well with empirical data, and show that increasing compression ratios and retarding the intake valve closing (IVC) timing relative to selected baseline conditions could effectively improve thermal efficiency. In addition, employing moderate EGR ratios is also effective for avoiding knock. Overall, the optimization of operating conditions reported in the present paper increased thermal efficiency relative to the selected baseline conditions by 5% points.