Compared with ordinary gasoline, using ethanol gasoline blends as fuel of Internal Combustion Engine is beneficial for the performance of power, economy and emission of engine. However, the fuel ethanol blended in ethanol gasoline blends currently is usually anhydrous ethanol, which requires dewatering implementer in production process, and the cost is high. Therefore, the production cost can be significantly reduced by replacement of anhydrous ethanol with hydrous ethanol while exerting the advantage of ethanol gasoline blends. In this study, computation fluid dynamics (CFD) software CONVERGE is employed to establish a simulation model of an actual gasoline direct injection (GDI) engine, and investigate the effect of burning hydrous ethanol gasoline blends and different injection strategy on combustion process and emission, and the validity of the model was validated by experiments. The numerical results show that compared with ordinary gasoline burning hydrous ethanol gasoline blends can accelerate combustion, expand the high temperature region during combustion, and reduce the formation of soot. When changing the start of injection (SOI) timing, due to factors such as wall impingement, fuel evaporation of and in-cylinder flow, the case with injection at -270 CAD has the best uniformity of mixture gas has, the fastest rate of heat release (RoHR), the highest in-cylinder pressure peak and optimal timing of pressure peak. Double injection strategy can improve the fuel evaporation rate, optimize the distribution of the mixture gas, and reduce NOx emissions. The optimal secondary injection timing is -130 CAD with a ratio of 25%. The lean stratified combustion mode is also explored, and has the capability to reduce the combustion pressure and temperature. It also has a latent capacity of decreasing the formation of NOx and Soot.