In order to meet more and more stringent legislation on fuel consumption and emission, a TGDI engine with variable compression ratio and valve actuation is developed to realize excellent fuel economy and low emission, while achieving high performance to guarantee fun-to-drive. A superior combustion system is of great importance to achieve this target. In this study, both CFD simulation analysis and transparent engine test investigation were extensively conducted in order to ensure efficient and effective design. As the first step, 1D thermodynamic simulation was conducted to optimize controlling parameters for each representative engine operating condition, and the results served as the input and boundary condition for the following 3D CFD simulation. Then, 3D CFD simulation was carried out to guide design improvement and gain insight into in-cylinder flow, fuel-air mixture formation and combustion, which were then confirmed by transparent engine study. Transparent engine study was carried out under four typical operating conditions: catalyst heating, two part loads (low and high), and full load, and measurement data were analyzed in terms of combustion stability, combustion phasing, combustion duration, mixture formation and emission (HC/NOx/soot). Various parameters, such as injection timing, compression ratio, etc., were adjusted to study their influence on combustion. Several injector variants were tested in order to select the best variant for following P&E development of multi-cylinder target engine. The results indicate that the targets of combustion system were achieved. Thanks to CFD simulation and transparent engine investigation, an optimized combustion system was efficiently developed and released for following P&E development.