In 1976, a new overhead cam engine based on a similar layout was designed and brought into production in 2 and 2.5-litre displacements for the Gamma.

One year later it was replaced by a true 1.8 L; 109.8 cu in (1,800 cc) engine thanks to a longer 74 mm (2.91 in) stroke.

Lancia developed the large light-alloy overhead camshaft 2.0-litre and 2.5-litre flat-4 engines specifically for the Lancia Gamma, rather than using Fiat derived engines as used in the Beta and Montecarlo and were in production between 1976 and 1984.

Replacing the 2.0 L pushrod engine used in the Flavia, the new 2.0 L; 122.0 cu in (1,999 cc) OHC engine produced 120 bhp (89 kW; 122 PS) at 5500 rpm[2] and 172 N⋅m (127 lb⋅ft) of torque at 3500 rpm.

The 2.5 L; 151.6 cu in (2,484 cc) engine was initially available with twin-choke Weber carburetors, but in the last few years of production it was equipped with fuel injection.