A two-cycle internal combustion engine with rear compression chamber, other than that of a crank case. This present engine has valves that can be screwed on the engine block near top dead center, and is actuated by air pressure. This present two-cycle engine uses an oil sump similar to that of a four-cycle engine, which eliminates the need to premix oil with the fuel. This present engine has a stationary piston which operates within a movable piston to form a rear-compression chamber. The movable piston has ports near its crown to transfer charge to the combustion chamber. The movable piston also has ports near bottom of its skirt to allow the fuel and air mixture to enter the rear compression chamber. This engine has a piston seat which is adapted to connect the movable piston to the connecting rod.