Among all enhanced oil recovery scenarios, gas and steam injections seem to be promising processes to implement in naturally fractured reservoirs. Major drawbacks of steam injection are availability of water near the injection site and the high cost of steam generation. A new enhanced oil recovery process named steam alternative CO2 is proposed in this study, which combines the benefits of steam injection and miscible CO2 injection. The experiments aimed to investigate the potential of oil recovery by steam alternative CO2 injection and to optimize design parameters of the proposed method. Gravity drainage experiments have been carried out on a low permeable outcrop carbonate rock, which was surrounded by fracture, established with a novel experimental method. The matrix block was saturated using a recombined mixture of Iranian live oil, while by means of pumping water into the annular space, space between rubber sleeve and outer jacket, high over burden pressure was exerted to obtain the desired homogeneous saturation. Using a back pressure regulator the pressure was kept above bubble point pressure. The inlet was attached to a constant pressure pump injecting CO2 or steam above bubble point pressure, then the over burden pressure was removed gradually and the inlet fluid inflated the rubber sleeve. The amount of produced water from the annular space was recorded to estimate the distance between the rubber sleeve and sand face; this distance creates the fracture surrounding the core. Gas was injected into the fracture at pressures above the bubble point of the oil. Oil recovery, as a function of time, was monitored during the experiments. Results demonstrated that steam alternative CO2 injection produces more oil as compared to both CO2 and steam injections in separate schemes. Gravity drainage experiments indicated that there are optimum values for a number of injected cycles of steam and CO2 and volumetric steam over CO2 ratio; it was proven that it is more efficient to inject CO2 prior to steam slug.