The rapid expansion of the market for remotely piloted aircraft (RPA) includes a particular interest in 10-25 kg vehicles for monitoring, surveillance, and reconnaissance. Power-plant options for these aircraft are often 10-100 cm3 internal combustion engines. Both power and fuel conversion efficiency decrease with increasing rapidity in the aforementioned size range. Fuel conversion efficiency decreases from ∼30% for conventional-scale engines (>100 cm3 displacement) to <5% for micro glow-fuel engines (<10 cm3 displacement), while brake mean effective pressure decreases from >10 bar (>100 cm3) to <4 bar (<10 cm3). Based on research documented in the literature, the losses responsible for the increase in the rate of decreasing performance cannot be clearly defined. Energy balances consisting of five pathways were experimentally determined on two engines that are representative of Group-2 RPA propulsion systems and compared to those in the literature for larger and smaller engines. The five pathways were brake power, cooling load, sensible exhaust enthalpy, incomplete combustion, and short-circuiting. The results show that incomplete combustion and (in the case of two-stroke cycle engines) short-circuiting are responsible for the decrease in fuel conversion efficiency as engine displacement decreases from greater than 100 cm3 to the 10 cm3 to 100 cm3 size range. The results show that the percentage of heat-transfer losses in 10-100 cm3 engines was not appreciably higher than those in conventional engines and that these engines have thermal efficiencies (fraction of shaft work to released energy) of ∼35%, which are comparable to those of conventional-scale spark-ignition and compression-ignition engines. As engine displacement decreases below 10 cm3, heat-transfer losses increase, compounding with already large short-circuiting and incomplete combustion losses. The result is a rapid decrease in both power and fuel conversion efficiency. In addition to these scaling results, the high short-circuiting noted in the engines studied (40-50% at some wide-open-throttle conditions) underscores the benefits of employing short-circuiting management techniques such as throttle-body injection and direct injection, exhaust and intake tuning, and port optimization. The cost-benefit tradeoff of these techniques in the context of commercial-off-the-shelf (COTS)-based design is discussed.