The shift towards environmentally friendly and sustainable transportation has heightened interest in hydrogen-fueled internal combustion engines (H2-ICEs) because of their potential for considerable ecological advantages. This research investigates the modeling and simulation of hydrogen combustion engines, emphasizing the optimization of performance factors like air-fuel ratio (AFR) and compression ratio (CR). The study used computational fluid dynamics (CFD) integrated with comprehensive chemical kinetics to assess flame propagation, heat transfer, and the effects of lean and stoichiometric air-fuel ratios (λ = 1.2 to 3.0) within compression ratios spanning from 14:1 to 20:1. Principal results underscore the relationship between thermal efficiency and nitrogen oxide (NOx) emissions, providing insights for optimizing power production while minimizing environmental effect. The research examines hydrogen’s distinctive characteristics, including low ignition energy, extensive flammability limitations, and high energy density, as well as issues associated with NOx generation and storage needs. This study enhances hydrogen combustion technologies by determining optimum operating conditions and design techniques, enabling cleaner and more sustainable energy solutions in transportation and other sectors. The findings illustrate the practicality of adapting current internal combustion engine infrastructure for hydrogen use, highlighting its significance in reducing the carbon footprint of industrial and transportation sectors without requiring major systemic modifications.