Abstarct: The consumption of fossil fuels around the world has caused many problems such as the release of many pollutants. The transportation system, which is one of the major consumers of fossil fuels in the country, plays a keyrole in the discussion of pollutant production and fuel consumption. The carbon monoxide pollutants produced by automobiles that result from the process of incomplete combustion in the engine are one of the most dangerous pollutants in the earth. One way to improve combustion quality in combustion engines is to inject hydrogen gas as an auxiliary fuel into the engine. In this research, we have used and studied hydroxy electrolyzer to produce and inject gas into the engine. Initially, the effect of parameters such as geometry and distance of electrodes and other physical parameters such as ultrasonic waves, magnetic field and pulsed current on water electrolysis process have been evaluated. According to the results, plate electrodes with a distance of 1 mm have the highest efficiency among other geometrical modes. Also, the effect of pulsed current on increasing electrolysis efficiency is more than other. In order to evaluate the effect of hydroxy gas injection to the combustion engine, first, the effects of hydroxy gas injection to the EF7 engine was investigated. According to the results, injection of this gas reduced carbon monoxide gas by about 90%. Then, the electrolyzer energy consumption was calculated by considering different physical parameters. According to the results, applying pulsed current to the electrolyzer increased the efficiency of the electrolysis process more than the other parameters. Also, a hybrid system consisting of engine, electrolyzer and thermoelectric modules (for recovering the engine waste heat) was designed and analyzed. Finally, an economic and environmental analysis of the designed hybrid system is presented.