An advanced heat insulation coat, named Smart Thermal Coating (Smart TIC), was investigated in a marine low-speed two-stroke engine. Different with the conventional adiabatic engines that feature constant high temperature on combustion walls and low volumetric efficiency, the Smart TIC using low-heat-conductivity and low-heat-capacity materials can produce ''Temperature Swing'' (Temperature fluctuation) on the combustion chamber walls, reducing the heat transfer loss while increasing the volumetric efficiency and fuel efficiency. The performance of the Smart TIC with various thicknesses and thermophysical properties were evaluated through numerical simulations based on the ANSYS Software and CFD-code CONVERGE. The results show that the thinner Smart TIC can significantly increase the volumetric efficiency and thermal efficiency of the engine. The Smart TIC with the thermal conductivity of 0.1 W/((m*K)), the heat capacity of 20 J/(kg*K) and the thicknesses of 0.1 mm can increase the indicated thermal efficiency by up to 3.55% of the engine with little increases of NOx emissions. Furthermore, according to exergy analysis of exhaust gas, the engine with Smart TIC can improve exhaust energy available, which could improve fuel efficiency by waste heat recovery of engine. In addition, the potential of applying Smart TIC in a high-speed diesel engine was investigated in the last part, the results show the Smart TIC also can effectively improve the thermal efficiency of high-speed four-stroke engine. These results are believed to valuable reference for engine researchers and developers to further improve thermal efficiency of engine