To achieve a step improvement in engine efficiency, a novel split cycle engine concept is proposed. The engine has separate compression and combustion cylinders and waste heat is recovered between the two. Quasi-isothermal compression of the charge air is realised in the compression cylinder while isobaric combustion of the air/fuel mixture is achieved in the combustion cylinder. Exhaust heat recovery between the compression and combustion chamber enables highly efficient recovery of waste heat within the cycle. Based on cycle analysis and a one-dimensional engine model, the fundamentals and the performance of the split thermodynamic cycle is estimated. Compared to conventional engines, the compression work can be significantly reduced through the injection of a controlled quantity of water in the compression cylinder, lowering the gas temperature during compression. Thermal energy can then be effectively recovered from the engine exhaust in a recuperator between the cooled compressor cylinder discharge air and the exhaust gas. The resulting hot high pressure air is then injected into a combustor cylinder and mixed with fuel, where near isobaric combustion leads to a low combustion temperature and reduced heat transferred from the cylinder wall. Detailed cycle simulation indicates a 32% efficiency improvement can be expected compared to the conventional diesel engines. (C) 2015 Elsevier Ltd. All rights reserved.