This paper reports the engine and vehicle simulation and analysis done at Lawrence Livermore (LLNL) as a part of a joint optimized hydrogen engine development effort. Project participants are: Sandia National Laboratory, California (SNLC), responsible for experimental evaluation; Los Alamos National Laboratory (LANL), responsible for detailed fluid mechanics engine evaluations, and the University of Miami, responsible for engine friction reduction. Fuel cells are considered as the ideal power source for future vehicles, due to their high efficiency and low emissions. However, extensive use of fuel cells in light-duty vehicles is likely to be years away, due to their high manufacturing cost. Hydrogen-fueled, spark-ignited, homogeneous-charge engines offer a near-term alternative to fuel cells. Hydrogen in a spark-ignited engine can be burned at very low equivalence ratios, so that NO{sub x} emissions can be reduced to less than 10 ppm without catalyst. HC and CO emissions may result from oxidation of engine oil, but by proper design are negligible (a few ppm). Lean operation also results in increased indicated efficiency due to the thermodynamic properties of the gaseous mixture contained in the cylinder. The high effective octane number of hydrogen allows the use of a high compression ratio, further increasing engine efficiency.