Biomass-fueled engines are a promising way to reduce the consumption of and dependence on fossil fuels. To create a working prototype, a detailed study of the thermodynamic cycle was developed. The dead volume was revealed to be the most limiting parameter for the engine efficiency. The cycle efficiency is reduced from 51.8% to 30.5% for the given example. The engine needs to be properly designed to minimize energy losses. In addition, the optimal compression ratio of the cycle is very low (about 3.5), losing energy in the exhaust gases and contributing to an inefficient engine. However, using a turbocharger can improve the cycle efficiency, combining the basic cycle with a Brayton cycle. Moreover, a two-stroke engine design is recommended for biomass-fueled engines. It allows minimization of the dead volume, is less sensitive to dirt, and avoids gas exchange with the combustion chamber during scavenging. Finally, the combustion chamber of the initial prototype was redesigned, based on the aforementioned improvements and allowing the successful start-up of the engine. This work demonstrates that biomass is a viable alternative to fossil fuels in applications where internal combustion engines are required.