In order to improve the natural gas engine (NGE) fuel economy, a steam direct injection method has been presented in the present study. In this method, exhaust was employed to heat water to produce superheated steam firstly. After that, at the power stroke, steam was injected into the cylinder directly. The potentials for fuel savings by this method are evaluated. First, ideal thermodynamic cycle of steam injected NGE is analyzed. Then, a baseline NGE is modeled and validated through experiments. After that, based on the simulation model, the effects of different steam injection parameters on the NGE performance are discussed, including steam mass, temperature and injected timing. The results show that the NGE fuel economy is significantly improved with steam direct injection. With optimal steam mass, 3.9-5.2% reductions of the NGE brake specific fuel consumption (BSFC) are obtained over different speeds, when steam temperature and injected timing are 550 K and 50 deg, respectively. Steam mass and injected timing have great influences on the NGE BSFC. However, steam mass is limited by pinch point temperature difference of the evaporator and exhaust temperature at the evaporator exit. In addition, steam injected timing is restricted by pressure inside the cylinder. (C) 2019 Elsevier Ltd. All rights reserved.