A theoretical analysis has been carried out of the two-component, two-phase regenerative Stirling cycle using a mixture of condensable and incondensable gases as a working fluid. When the condensable component always remains in its wet region throughout the entire cycle, the thermal efficiency is smaller, while the specific work is remarkably larger, if compared with those of an ordinary one-component Stirling cycle working under the same temperature conditions. In the case where the condensable component is superheated during the isothermal expansion process, the rate of increase of the specific work with the cycle compression ratio becomes somewhat smaller than that of the cycle working in the wet region, but considerably higher thermal efficiency can be obtained. Generally, the cycle characteristics are mainly dependent on the thermophysical properties of the condensable component.