In-cylinder fuel-air mixing in a compressed natural gas (CNG)-fuelled, single-cylinder, spark-ignited engine is analysed using a transient three-dimensional computational fluid dynamic model built and run using STAR-CD, a commercial CFD software. This work is motivated by the need for strategies to achieve improved performance in engines utilizing gaseous fuels such as CNG. The transient in-cylinder fuel-air mixing is evaluated for a port gas injection fuelling system and compared with that of conventional gas carburetor system. In this work pure methane is used as gaseous fuel for all the computational studies. It is observed that compared to the premixed gas carburetor system, a substantial level of in-cylinder stratification can be achieved with the port gas injection system. The difference of more than 20% in mass fraction between the rich and lean zones in the combustion chamber is observed for the port gas injection system compared to less than 1% for the conventional premixed system. The phenomenon of stratification observed is very close to the “barrel stratification” mode. A detailed parametric study is undertaken to understand the effect of various injection parameters such as injection location, injection orientation, start of injection, duration of injection and rate of injection. Furthermore, the optimum injection timing is evaluated for various load-speed conditions of the engine. It is also observed that the level of stratification is highest at 50% engine load with a reduced level at 100% load. For low engine loads, the level of stratification is observed to be very low. To analyse the effect of stratification on engine performance, the in-cylinder combustion is modeled using the extended coherent flame model(ECFM). For simulating the ignition process, the arc and kernel tracking ignition model(AKTIM) is used. The combustion model is first validated with measured in-cylinder pressure data and other derived quantities such as heat release rate and mass burn fraction. It is observed that there is a good agreement between measured and simulated values. Subsequently, this model is use to simulate both premixed and stratified cases. It is observed that there is a marginal improvement in terms of overall engine efficiency when the stoichiometric premixed case is compared with the lean stratified condition. However, a major improvement in performance is observed when the lean stratified case is compared with lean premixed condition. The stratified case shows a faster heat release rate which could potentially translate to lower cycle-to-cycle variations in actual engine operation. Also, the stratified cases show as much as 20% lower in-cylinder NOx emissions when compared with the conventional premixed case at the same engine load and speed, underscoring the potential of in-cylinder stratification to achieve improved performance and lower NOx emissions.