Abstract: A two-stroke in-cylinder brake technology consisting of main brake and auxiliary brake was studied by using a self-developed fully hydraulic variable valve system（FHVVS）. A simulation model of a six-cylinder diesel engine was established with GT-Power. The influence of exhaust brake lift opening timing and maximum lift on main brake performance was analyzed,and the influence of exhaust valve early closing on auxiliary brake performance was discussed. The main design parameters of valve cam and FHVVS were determined. The intake and exhaust valve lifts of the FHVVS were measured on a test bench. The results show that a fast and smooth switching between single and twice opening of the intake and exhaust valves in a working cycle can be realized with the FHVVS. The performance of two-stroke in-cylinder brake was simulated based on the measured valve lift curve. It is found that the two-stroke brake greatly improves the brake power at low speed,the brake torque is 57.1% higher than that of original in-cylinder brake at the speed of 1 100 r/min. Two-stroke brake significantly reduces the maximum in-cylinder pressure at high speed,and the maximum in-cylinder pressure is 28.2% lower than that of original brake at the speed of 2 100 r/min.