Cylinder deactivation has become common not only in large swept volume gasoline V-engines but also in cheaper highly downsized automotive engines. Cylinder deactivation strategy leads to a combination of reduced throttling and pumping losses and consequently, to CO2 emissions reduction. This is achieved by deactivation of some cylinders and by moving the operation point of the firing cylinders to higher loads to compensate for the deactivated cylinders. This paper focuses on 1.4 litre direct injection gasoline 4-cylinder (inline) engine and the development of its deactivation strategy in Model in the Loop (MiL) environment using Ricardo 1-D gas real-time code ‘WAVE-RT’ as the virtual engine controlled by the engine control strategy. The engine control strategy can be easily flashed into rapid prototyping ECU and validated on the testbed. The engine does not include ‘expensive’ 2nd + 3rd valve closing technology and therefore, the deactivation feature is achieved just by zero cylinder fueling applied to one or more cylinders to achieve the best possible fuel consumption. The real-time 1-D gas thermodynamic engine model is validated within the entire engine operating range against the test data with/without deactivated cylinders. Moreover, further validation is done by running both the physical engine and the 1-D gas real-time code at transient load/speed cycles. The results from the steady-state and transient cycles show CO2 reduction. Using the MiL approach, the best cylinder deactivation strategy regions are identified. Additionally, the proposed MiL environment containing the 1-D gas real-time code and the engine control strategy can be further used for the development and calibration of advanced dynamic deactivation (known as skip-fire) strategies.