In the regenerative engine, effective heat exchange and recurrence between gas and solid can be achieved by the reciprocating movement of a porous medium regenerator in the cylinder, which considerably promotes the fuel-air mixture formation and a homogeneous and stable combustion. A two-dimensional numerical model for the regenerative engine is presented in this study based on a modified version of the engine computational fluid dynamics (CFD) software KIVA-3V. The engine was fueled with methane and a detailed kinetic mechanism was used to describe its oxidation process. The characteristics of combustion and emission of the engine were computed and analyzed under different equivalence ratios and porosities of the regenerator. Comparisons with the prototype engine without the regenerator were conducted. Results show that the regenerative engine has advantages in both combustion efficiency and pollutant emissions over the prototype engine and that using lower equivalence ratios can reduce emissions significantly, while the effect of the porosity is dependent on the equivalence ratio used.