The International Lubricant Standardization and Approval Committee (ILSAC) GF-3 passenger car engine oil specification has been introduced commercially in July 2001. The new specification oil provides superior performance in terms of fuel economy, control of high temperature deposits, and oil consumption. These enhanced performances of GF-3 engine oil need high quality base oil as well as a better additive system. In this paper, the effect of base oil on various performances of ILSAC GF-3 engine oil was investigated. From the GF-3 sequence engine tests, Group III base oil shows better performance in fuel economy retention, oxidation and varnish control than combination of group III and group II or group III and group 1.