In this study, thermodynamic analysis of a gamma-type Stirling engine driven by Scotch Yoke mechanism was conducted. The advantages of Scotch Yoke mechanism over classical crank mechanism were discussed in detail. In the analysis hydrogen was used as working gas. Working space was divided into 16 nodal volumes. Solution of conservation of mass and energy equation were obtained for each nodal volume. Wall temperatures of nodal volumes were assumed to be constant and temperature variations in nodal volumes were calculated by means of the first law of the thermodynamics. Maximum engine power was obtained as 1105 W at 800 rpm engine speed and gas mass of 0.3 g for 1200 W/m(2)K heat transfer coefficient. The optimum phase angle, which was not affected significantly by hot end temperature, gas mass, and heat transfer coefficient variations, was determined as 90 degrees degrees at engine speed of 600 rpm. However, it was determined that engine speed has a great impact on optimum phase angle and a variable phase angle mechanism may be useful to obtain maximum specific power from the engine at different engine speeds. At engine speed of 600 rpm, the maximum specific power of the engine was 695 W/l for 1.65 compression ratio and 90 degrees degrees phase angle.