Methanol is a kind of clean and renewable energy source and a liquid energy carrier at ambient conditions, which offers immense potential in the field of energy propulsion. The technology by using engine waste heat to decompose methanol into hydrogen-rich mixture and subsequently injecting into the engine cylinder for combustion can enhance energy efficiency and reduce pollutant emissions. The effects of blending the hydrogen-rich gas on the fundamental combustion properties of methanol fuel were given in terms of oxidation mechanisms, ignition delay time, and flame propagation speed. Considering that the combustion of hydrogen-rich mixture promoted faster flame propagation and extended the lean burn limit, the changing laws of in-cylinder flame propagation, combustion heat release, cycle efficiency, and pollutant emissions were delineated. The study laid theoretical groundwork and provided practical support for controlling the combustion process of fuel blended with hydrogen-rich gas and its application in SI engines, which was of great significance in the era of energy security and dual-carbon green development.