To improve the fuel efficiency of internal combustion (IC) engine and also achieve the goal of direct usage of methanol fuel on IC engine, an approach of exhaust heat dissociating methanol was investigated, which is a kind of method for IC engine exhaust heat recovery (EHR). A bottom cycle system is coupled with the IC engine exhaust system, which uses the exhaust heat to evaporate and dissociate methanol in its catalytic cracker. The methanol dissociation gas (including methanol vapor) is used as the fuel for IC engine. This approach was applied to both naturally aspirated (NA) engine and turbocharged engine, and the engine performance parameters were predicted by the software GT-power under various kinds of operating conditions. The improvement to IC engine performance and the conversion efficiency of recovered exhaust gas energy can be evaluated by comparing the performances of IC engine fueled with various kinds of fuels (or their compositions). Results show that, from gasoline engine, methanol vapor engine to dissociated methanol engine, the full load power decreases successively in the entire speed area due to the declining of volumetric efficiency, while it is contrary in the thermal efficiency at the same brake mean effective pressure (BMEP) level because of the improving of fuel heating value. With the increase of BMEP, the conversion efficiency of recovered exhaust gas energy is promoted. All those results indicate that the approach of exhaust heat dissociating methanol has large energy saving potential with great application prospect to IC engines. (C) 2013 Elsevier Ltd. All rights reserved.