The emphasis automotive manufacturers have placed on lightweight, low-cost components has resulted in a number of custom-engineered materials which have outstanding properties. High temperature polymers and composites, low cost nickel-based alloys, and surface coatings are areas in which material development has lead to parts with improved performance at lower cost. This paper explores the feasibility of employing laser surface processing to provide better performance for two key engine applications, cylinder bores and valve seats.The Laser Induced Surface Improvement (LISI, patent-pending) technique developed at The University of Tennessee Space Institute, is a surface modification technique which can provide high quality surface layers. Example laboratory tests on processed aluminum substrates indicate that hardness and wear-resistance can be substantially improved. One of the advantages of LISI, as in thermal spray, is the capability to select and control the properties of the processed surface, and microhardness values of up to 1000+ Hk have been measured, with typical values ranging from 300-500 Hk. These results have created some interest in LISI for application in providing a wear-resistant cylinder bore surface directly on aluminum engine blocks and a high temperature wear-resistant valve seat surface on aluminum engine cylinder heads. Typical performance requirements and manufacturing constraints for these two applications will be discussed, and the performance of LISI-processed material will be discussed.