A new air-cooled SI two-stroke gasoline engine has been developed for an arborist-chainsaw. This engine has a displacement of 25 cm3 and generates about 1.1 kW and complies with the latest CARB and EPA exhaust regulations by optimizing scavenging flows and the use of a catalytic converter. Characteristics of lightweight, compact and high power-to-weight ratio are required for handheld chainsaws, especially for arborist chainsaws. As a matter of course, these characteristics are needed for engine itself in order to satisfy such market requirements for hand-held power equipment. To realize lightweight and compact design, the placement of catalytic converter is optimized for the engine and a two-piece crankshaft is adopted. Moreover, as preliminary studies, computer analyses such as CFD simulations of in-cylinder flow and cooling air flow, boundary pressure of piston surface during piston movement were performed to estimate output power, short circuit losses of fuel-air mixture, engine cooling performance and anti-seizure performance. Then, these performances were evaluated and modified by experimental studies. This paper presents overview of the arborist chainsaw, results of the simulation analyses and experimental evaluations.