Exhaust gases remaining inside the engine cylinder after the exhaust stroke premix with fresh air-fuel combustible mixture and affect combustion process in the engine cylinder. Due to significantly higher temperature of these exhaust residuals (ExR) compared to the external exhaust gases recirculation (EGR), their impact on the in cylinder combustion process is also different from impact of EGR. To control amounts of ExR independent of engine working parameters, the variable valve timing was introduced. It is known that variable valve timing affects not only volumetric efficiency and performance of the internal combustion reciprocating engine but also influences the amount of exhaust residuals remaining in the engine cylinder. These exhaust residuals impact combustion rates, combustion stability, knock and also play crucial role on exhaust toxic emissions. In this manuscript, the effect of variable valve overlap was studied on A. exhaust toxic emission (NOx, CO and THC), and B. combustion phasing and engine performance on a spark ignited natural gas fueled engine. The investigation was carried out in a single cylinder research engine at constant load. The engine was equipped with high authority dual independent cam phasors for both intake and exhaust values, but for the purpose of this study, the exhaust valve timing was fixed and intake valve timing was changed to vary the amount of exhaust residuals remaining in the engine cylinder. The correlation between valve overlap and exhaust residuals were determined. It was observed that correlation in the positive overlap range between 55 and 85 deg was almost positive linear. Regarding toxic exhaust emission, increase in exhaust residuals from 9.6 to 12.3% (change by 28%) caused reduction in NOx by 67% and increase in both CO and THC by approximately 75%. Additionally, it did not significantly affect the engine's specific fuel consumption. Summarizing, strong correlation between in-cylinder exhaust residuals and toxic emissions, and combustion phases exists in the methane fueled spark ignited engine equipped with VVT.