A shape memory alloy engine has been developed for the purpose of extracting the mechanical energy from a small difference in temperature. The engine is mainly composed of two pulleys (high temperature and low temperature) and single belt made of the nickel titanium shape memory alloy. The alloy memorizes a shape arcing in the direction opposite to the direction of the belt are around the pulleys. When the temperature of the belt which is in contact with the high temperature pulley rises above the transformation temperature, a return to the memorized shape generates a force which rotates the pulleys.To make the heat transfer more effective, the engine was designed so that the lower part of the two pulleys are embedded in hot and cold water, respectively. This engine has achieved a continuous speed of about 500 revolutions per minute. The effects of water temperature and torque loss on engine output power have been investigated experimentally.To predict the performance of the shape memory alloy engine, the stress change of the shape memory alloy caused by temperature change has been also investigated with the bending stress test, and a torque loss of the engine system was measured. The predicted results were coincident with the output power experiment.