A one-dimensional thermodynamic simulation model was built based on the test data and using the system dynamics method to study the effects of geometric compression ratio, late intake valve closing (LIVC), air fuel ratio, exhaust gas recirculation (EGR) and ignition advance on the thermal efficiency of a straight line 6 cylinder miller cycle natural gas engine. The result shows that improve engine geometry compression ratio appropriately can effectively improve engine energy distribution, engine power and fuel economy. And compared with LIVC setting, ignition advance setting has a more obvious effect on engine performance. Proper ignition advance ensures high efficiency of the engine. Moderately increasing EGR rate can effectively guarantee the low NOx emission, and further increase LIVC can reduce exhaust gas dilution effect on inhibition of engine combustion rate, to ensure that the engine has good thermal efficiency. 1