Development of an engine with good fuel economy is very important for successful implementation of long endurance miniature UAVs (unmanned aerial vehicles). In the study, a 4-stroke glow-plug engine was modified to a gasoline-fueled spark-ignition engine. Engine tests measuring performance and friction losses were conducted to tune a simulation program for performance prediction. It has been found that excessive friction losses are caused by insufficient lubrication at high speeds. The simulation program predicts that engine power and fuel economy get worse with high altitude due to increasing portion of friction losses. The simulation results suggest quantitative guidelines for further development of a practical engine.