Otto, born at Holzhausen, Hesse-Nassau, was the son of a farmer. Otto left school at 16, and later moved to Cologne where he became fascinated by the gas engines developed by Frenchman Jean-Joseph-Étienne Lenoir and displayed for the first time in 1859. Lenoir's engines had a two-stroke design and burned coal (or illuminating) gas; they were also notoriously inefficient. Nevertheless, in 1861, Otto built an experimental engine based on Lenoir's design. Three years later, he joined forces with industrialist Eugen Langen and together they formed the Gasmotorenfabric Company with its factory at Deutz near Cologne to build and market his engines. Otto and Langen had the able assistance of Franz Reuleaux, Gottlieb Daimler, and Wilhelm Maybach as part of their engineering team.

In 1867, Otto and Langen announced their first production engine--a noisy two-stroke engine that improved upon the Lenoir design by compressing the gas before it was ignited. This...