Ethanol produced from biomass has high octane number and gives lower emissions. Therefore, it is used as alternative fuel in the gasoline engines. In this study, ethanol was used as fuel at high compression ratio to improve performance and to reduce emissions in a small gasoline engine with low efficiency. Initially, the engine whose compression ratio was 6/1 was tested with gasoline, E25 (75% gasoline + 25% ethanol), E50, E75 and E100 fuels at a constant load and speed. It was determined from the experimental results that the most suitable fuel in terms of performance and emissions was E50. Then, the compression ratio was raised from 6/1 to 10/1. The engine was tested with EO fuel at a compression ratio of 6/1 and with E50 fuel at a compression ratio of 10/1 at full load and various speeds without any knock. The cylinder pressures were recorded for each compression ratio and fuel. The experimental results showed that engine power increased by about 29% when running with E50 fuel compared to the running with EO fuel. Moreover, the specific fuel consumption, and CO, CO(2), HC and NO(x) emissions were reduced by about 3%, 53%, 10%, 12% and 19%, respectively.(C) 2007 Elsevier Ltd. All rights reserved.