The efficiency of an internal combustion engine (ICE) is essential for automobiles and motorcycles. Several studies have demonstrated that the homogeneous charge compression ignition (HCCI) is a promising technology for realizing engines with high efficiency and low emissions. This study investigated the combustion characteristics of the HCCI using a 125 cc motorcycle engine with n-heptane fuel. The engine performance, combustion characteristics, and thermal efficiency were analyzed from experimental data. The results revealed that a leaner air–fuel mixture led to higher engine efficiency and output. The improvement of engine output is contradictory to the general trend. Energy balance analysis revealed that lower heat loss, due to the low cylinder gas temperature of lean combustion, contributed to higher efficiency. A double-Wiebe function provided excellent simulation of the mass fraction burned (MFB) of the HCCI. Air cycle simulation with the MFB, provided by the double-Wiebe function, was executed to investigate this phenomenon. The results indicated that a better combustion pattern led to higher thermal efficiency, and thus the engine output and thermal efficiency do not require a fast combustion rate in an HCCI engine. A better combustion pattern can be achieved by adjusting air–fuel ratio (AFR) and the rates of dual fuel and exhaust gas recirculation (EGR).