Worldwide emission legislations have promoted the development of more efficient internal combustion engines through engine downsizing and advanced lean-burn combustion concepts. However, these measures if solely employed in the next generation vehicles are still not enough to comply with future CO2 limits, so powertrain hybridisation has been already set up. In this circumstance, internal combustion engines play a less important role in the vehicle's propulsion system serving mostly as a range extender or extra power supply unit. Power density (kW/dm(3)) and power per unit mass (kW/kg) are as important as fuel consumption, so not only four-stroke engines may serve to this purpose but also two-stroke engines. Therefore, the present research evaluates the performance and combustion characteristics of a two-stroke cycle engine embedded in the architecture of a contemporary four-stroke supercharged engine, with direct fuel injection, intake and exhaust valves, and a wet sump. Commercial gasoline and anhydrous ethanol (E100) were tested at loads from 0.2 MPa to 1.0 MPa indicated mean effective pressure and speeds varying from 800 rpm to 2400 rpm. The results demonstrated that ethanol increased the overall indicated efficiency by about 10% compared to gasoline, while improving the burning process at very light loads thanks to its higher tolerance to diluted combustion. At higher engine loads the calculated supercharger power consumption largely increased, which reduced the corrected indicated efficiency for both fuels tested. The maximum in-cylinder pressure of 6.5 MPa was obtained using ethanol at 160 Nm/dm(3) of torque and 800 rpm. The short time available for air-fuel mixing at high loads and excessive combustion dilution at low loads deteriorated the combustion process. The lowest combustion efficiency of 0.80 was obtained at transitioning regions from spark ignition to spark assisted compression ignition combustion with gasoline. The 50% of mass fraction burned was found closer to top dead centre at several operating conditions due to a largely diluted combustion. Finally, the exhaust gas temperature presented a peculiar behaviour due to a competition between combustion rate and exhaust gas dilution by the intake air. This resulted in an exhaust gas temperature as low as 500 K at full load and 800 rpm, while the maximum gas temperature of 740 K was observed at mid-loads.