Increasingly stringent regulations to reduce vehicle emissions have made it important to study emission mitigation strategies. Highly accurate control of the air-fuel ratio is an effective way to reduce emissions. However, a less accurate sensor can lead to reduced engine stability and greater variability in engine efficiency and emissions. Additionally, internal combustion engines (ICE) are moving toward higher compression ratios to achieve higher thermal efficiency and alleviate the energy crisis. The objective of this investigation was to analyze the significance of the accuracy of air-fuel ratio measurements at different compression ratios. In this study, a calibrated 1D CFD model was used to analyze the performance and emissions at different compression ratios. The results showed that carbon monoxide (CO) and nitrogen oxides (NOx) were sensitive to the equivalence ratio regardless of the compression ratio. With a slight change in the equivalence ratio, a high compression ratio had little effect on the change in engine performance and emissions. Moreover, with the same air-fuel ratio, an excessively high compression ratio (CR = 12) might result in knocking phenomenon, which increases the fluctuation of the engine output parameters and reduces engine stability. Overall, for precise control of combustion and thermal efficiency improvement, it is recommended that the measurement accuracy of the equivalence ratio is higher than 1% and the recommended value of the compression ratio are roughly 11.