To alleviate air pollution and eliminate pollutants from internal combustion engines, many researchers have paid more attention to compressed air engines (CAEs). However, the low energy utilization efficiency and low output power of a CAE hinder its development. In this paper, a new kind of CAE, which has four valves is proposed, which reduces the kinetic energy of the flowing air. Through analysis of the CAEs, a mathematical model of the working processes was developed. Using the simulation method, the performance of the new kind of CAE was obtained. To verify the theoretical model, a prototype of a four-valve of single cylinder piston type CAE was designed, and the experiment was carried out. Parameter influence analysis and optimization were studied to improve the four-valve CAE performance. Results show that, first, the output torque and output power of the four-valves of CAE are higher than of the two-valves of CAE. When the intake pressure is set at 0.6 MPa and 0.7 MPa, and the rotation speed is 450 rpm, the output torque of the four-valve of CAE is about 2.7 and 2.2 times that of the twovalve of CAE. The output torque and power differences between the two kinds of CAE ascend sharply with increased rotation speed. Second, the energy efficiency and output power are impacted significantly by the intake valve close angle and exhaust passage diameter. Thirdly, the optimization of the four-valve CAE can significantly enhance the output power compared with two-valve CAE. This research can be referred to in the design of the CAEs.