Appropriate test cycle is required for engine testing. To do so, a new methodology is developed for deriving Engine Test Cycle based on real world duty cycle. Transient speed and load is to be collected from the functional engine on the field. The duty cycle for cyclic operation will be developed from the actual transient speed and load conditions. An iterative process and the comparison of chi-square statistical data is used to categorize typical microtrips, segments of engine operation collected during performance of certain activities. Different microtrips of all activities were combined together to make up a cycle of operation and test cycle as well. These data's are compared to statistical data which is used to illustrate the raw data. On successful comparison, the transient test cycle is validated on the test bed. To facilitate further engine testing, the cycle is transformed into a schedule of torque and speed points at One second intervals. FTP (Federal Test Procedure) is used for normalizing the Data. From the conducted work a representative test cycle is developed for engine testing with respect to the application, also a general methodology is derived for engine test cycle development.