Abstract: In order to meet increasingly stringent emission regulations and reduce fuel consumption, development of modern powertrain is becoming more complicated, combining many advanced technologies. Gasoline engine downsizing is already established as a proven technology to reduce vehicle fleet CO2 emissions. Compressed natural gas (CNG) offers increased potential to further reduce both tailpipe CO2 and other regulated exhaust gas emissions without compromising driving performance. In this study, a turbocharged CNG port fuel injection (PFI) engine was developed based on gasoline version. Making most use of positive fuel properties of CNG, the paper quantifies the performance characteristics of downsized CNG engine considering reduced knock sensitivity, adaption of compression ratio and combustion efficiency. While peak cylinder pressure was controlled below 120bar, peak torque 180Nm, same level as gasoline variant, was realized from 3000rpm. The results achieved from the test engine whilst operating with CNG are also compared to measurements from turbocharged gasoline PFI and turbocharged gasoline direct injection (TGDI).With adapted compression ratio for CNG operation, effective combustion efficiency is over 38%, which is even higher than TGDI version. Finally, it was concluded that compared to gasoline application, operation with CNG will lead to 21% CO2 emission reduction as well as 44% mileage-specific fuel cost saving.