A liquid fuel that produces no toxic exhaust could help reduce pollution, potentially in urban areas. In this study, a simulation was conducted using the AVL Boost platform, on the use of liquid nitrogen (LN2) in a four-stroke engine. This study is focused on engine performance using directly introduced LN2 and the analysis of related aspects (inlet, outlet, and in-cylinder pressure, temperature, conditions for LN2 evaporation, etc.) that indicate the possible potential for the development of a zero-emission direct injection internal evaporation (DI-IE) LN2 engine. AVL Boost software was uniquely customized to accommodate the simulations, as modeling with LN2 was not available in the standard features. Simulation results, including indicated mean effective pressure (IMEP), effective torque, and power, were compared with similarly sized diesel and gasoline engines running at speeds of up to 1000 rpm. The LN2 injection mass was matched with air intake to evaluate the optimal combination. The simulation results showed that the enthalpy of the aspirated air was sufficient to evaporate and expand the injected amount of LN2 in each cycle, generating the in-cylinder pressure for the power stroke. The IMEP of the LN2 engine was similar to internal combustion engines, and its indicated efficiency was about four times higher (56–62%). The air separation process was 44% efficient in producing the required LN2, making the overall efficiency about 31%.