Direct injection of fuel has been seen as a potential method to reduce fuel short circuiting in two stroke engines. However, most work has been on low pressure injection. In this work, which employed high pressure direct injection in a small two stroke engine (2S-GDI), a detailed study of injection parameters affecting performance and combustion has been presented based on experiments for evaluating its potential. Influences of injection pressure (IP), injection timing (end of injection - EOI) and location of the spark plug at different operating conditions in a 199.3 cm3 automotive two stroke engine using a real time open engine controller were studied. Experiments were conducted at different throttle positions and equivalence ratios at a speed of 3000 rpm with various sets of injection parameters and spark plug locations. The same engine was also run in the manifold injection (2S-MI) mode under similar conditions for comparison. Finally experiments were also done on a four stroke manifold injection (4S-MI) engine of the same capacity for comparison. EOI timing was the most significant parameter with the spark plug location near the exhaust port being the most suitable in the 2S-GDI mode which exhibited significantly higher efficiency, lower HC and CO emissions for the same power output as compared to 2S-MI operation. Further 2S-GDI performed significantly better than 2S-MI over the entire load range; particularly at higher load conditions. It also developed higher peak power than 4S-MI. At same power output 2S-GDI exhibited slightly lower BTE and comparable emissions to 4S-MI.