An on-the-fly mechanism reduction approach for coupling complex chemistry and computational fluid dynamics (CFD) is proposed in this paper. The approach consists of element flux analysis and identification of active species and reactions based on flux magnitudes. A reduced mechanism involving the active species and reactions is generated to describe the local chemistry. The approach is applied dynamically in the CFD calculation by generating a locally accurate reduced mechanism for every computational cell and time step, enabling on-the-fly reduction. The emphasis of this work is on the numerical study of stratified homogeneous charge compression ignition (HCCI) combustion with detailed chemistry by using the proposed on-the-fly reduction scheme. A mechanism of n-heptane combustion with 161 species and 1540 reactions is used as the detailed mechanism in the simulation. KIVA-3V and CHEMKIN are used as the computational platforms. On-the-fly reduction predictions of species concentrations, temperature, and pressure are in excellent agreement with solutions obtained with the detailed mechanism but at a tremendously reduced CPU time. The on-the-fly reduction approach enables detailed characterizations of in-cylinder behaviors in stratified HCCI engines by incorporating detailed chemical kinetics in engine CFD computations.