This paper presents the numerical analysis of a controlled auto ignition (CAI), four stroke, single cylinder engine, by using methane fuel. The goal of this study was to determine how exhaust gas recirculation (EGR) rate affects combustion, emission and engine performance. The EGR rates were selected as 27 %, 32 %, 37 %, and 42 % by mass with excess air ratios of 1.0, 1.5, 2.0, and 2.5. An incylinder temperature of 570 K was considered at intake valve closing time (IVC) and an engine speed of 1500 rpm was used for all cases. The Computational Fluid Dynamics (CFD) code FLUENT was used for numerical analysis. The numerical modeling was solved by taking into consideration the effect of turbulence, by using the Renormalization Group Theory (RNG) k- model. The results indicate that increase in EGR rate and excess air ratio have significant effects on in-cylinder pressure, temperature, heat release rate, pressure rise rate, combustion duration, brake work, specific NOx and CO emissions, thermal efficiency and specific fuel consumption. Moreover, CAI combustion resulted in a rapid heat release rate which gives rise to an increase in the pressure rise rate, high temperature value and high level SNOx emission, when EGR rate was low level (up to 32 %) for excess air ratio() value of 1 and 1.5. To achieve CAI combustion resulting in low level SNOx emission, the mixture must include an EGR rate of more than 32 % or become leaner.