Engine performance depends on two main factors of engine speed and ignition time. Ignition timing can affect engine life, fuel economy and engine power. In this paper, to study engine performance of Peugeot 206 TU3A with comparison ratio of 10.5:1 and displacement of 1361CC in MATLAB software, a two-zone burned/unburned model with the fuel burning rate described by aWiebe function was used for modeling in-cylinder combustion. For studying this issue, thermodynamic models such as Woshni, Isentropic, etc. were used. Then, the experiments were carried out to validate the calculated data. The objective of the present work was to examine effect of ignition timing on the performance of an SI engine. For achieving this goal, at the speed of 3400 rpm, ignition timing was changed in the range of 41 degrees before the top dead centre to 10 degrees after TDC. By changing the ignition timing, the results of some characteristics such as power, torque, indicatory pressure, exhaust emission and efficiency were obtained and compared. The results demonstrated that optimal power and torque and the maximum efficiency were achieved at 31 degrees before the top dead centre and engine performance was improved by changing timing angle. It was also indicated that the maximum thermal efficiency could be accomplished while peak pressure occurred between 5 and 15 degrees of ATDC. The amounts of O2, CO2 and CO were almost constant but HC increased with increase of ignition timing.