Based on the law of conservation of energy, the energy model in each cycle of the free-piston generator was established. The energy conversion in one cycle was obtained and the transfer process in continuous cycles was analyzed. The rules of influence of different compress ratios on energy and performance were attained. The results showed that the brake efficiency of the free-piston generator could be 40% ideally. The loss in the combustion, scavenging and heat release was the big part of the whole. In the continuously running, much energy at the end of the power stroke in one cylinder was transferred into the other cylinder as the compress energy. It affected the next combustion. The effects with the compress ratio varying on energy conversion and brake efficiency were different. Keeping the compress energy stable was important for the operation control.