The combustion and knock characteristics in an engine were investigated under the homogeneous charge compression ignition (HCCI) operation condition fueled with and gasoline and di-methyl ether (DME) with regard to the valve timing, in order to identify an operating limit and correlation between knock and operating conditions. Commercial gasoline was used as fuel and injected at the intake port using port fuel injection equipment. Di-methyl ether (DME) was used as an ignition promoter and was injected directly into the cylinder during the intake stroke. Different intake valve timings and fuel amounts were tested to verify the knock characteristics of the HCCI engine. In order to characterize the high load operation limit, the peak combustion pressure, rate of combustion pressure rise, and indicated mean effective pressure were correlated with the knocking probability and intensity. The start of combustion was independent from the intake valve open (IVO) timing. The burn duration and the rate of the combustion pressure rise depended on the fuel quantity and the IVO timing. The knocking probability and intensity increased with the peak combustion pressure and the combustion pressure rise. According to the indicated mean effective pressure decrease when the total air excess ratio was lower than 2.4, the high load operating range of the test engine was limited to under 0.5 MW/m(2). The knocking probability can be predicted by two derived equations. The hydrocarbon emission increased at the retarded intake valve open timing and the lower total air excess ratio. The carbon dioxide emission was influenced mainly by the total air excess ratio.