We have built a prototype γ-type Stirling engine, which features twin power cylinders, built-in regenerator, helium charge, and magnetic coupling power transmission. Its maximum power output is 100 W at the hot-end temperature of 400 degree centigrade. In the meantime, we have developed, tested and versified a Stirling engine simulation code which is capable of simulating complete cycles of Stirling engines. In this project, we will first use the code to perform engine parameter optimization to obtain optimized geometric and operational parameters of the γ-type Stirling engine, and then we will rebuild the engine according to the optimized parameters. It is expected that the output power and efficiency of the prototype engine will be dramatically improved after it has been optimized.