The significantly poorer efficiency of a spark-ignition engine in the part load range compared to its efficiency at full load is the result on the one hand of the restriction losses and on the other hand of the severe combustion lag. It would be a conceivable proposition to considerably improve part load efficiency (10 % at bmep = 3 bar) by increasing the compression ratio although this is impeded by the risk of knocking combustion at full load. In combination with variable valve timing (this requires variable compression ratio) even 19 % efficiency improvement are achievable (1).This has given rise to a joint development programme between Mahle GmbH and Daimler-Benz. Research aimed at producing a piston with a variable compression height which can thus offer optimum compression ratio at every point of the map. This piston with variable compression height (VCH) is also employed in highly turbocharged diesel engines for limiting peak pressure, which enables brake mean effective pressure to be significantly increased without the need to strengthen the crank assembly, and has a favourable impact on overall engine efficiency.In addition to a detailed description of the operating principle of this VCH piston, the paper also presents the principal development stages and the current development status as well as the effects of a variable compression ratio on the characteristics of spark-ignition and diesel engines.