The Alag Y-03 was a Hungarian-made commercial 2.5 cc racing engine produced between 1957 and 1960. The engine was designed by the iconic Hungarian speed flier Gyula Krizsma, who was Alag's chief designer and later director of the MOKI Institute. 

The Alag Y-03 was a more or less conventional 2.5 cc racing engine of its day, featuring a twin ball-race crankshaft, cross-flow loop scavenging and disc rear rotary valve (RRV) induction. It was a development of Krizsma's self-constructed Alag VI prototype which he had used to good effect in the 1956 World Control Line Speed Championship, achieving a best speed of 179 km/hr (111.2 mph) for a very creditable 18^th place. On the strength of this, he persuaded his employers to authorize the further development of the engine into a commercial 2.5 cc racing powerplant. The resulting design was released in mid 1957 as the Alag Y-03, along with a 5 cc companion of similar design known as the Alag Y-02.

After setting a new Hungarian 2.5 cc speed record at 211 km/hr (131.1 mph) using one of the prototype Alag Y-03 units, Krizsma competed at the 1957 World Control Line Speed Championship using the same engine. As one would expect with a prototype, this unit differed in certain details from the final production model, although it shared the same basic design configuration. Using this engine, Krizsma managed a very respectable fourth place at a speed of 205 km/hr (127.4 mph), well ahead of the competing all-new Super Tigre G.20 V units from Italy as well as the Barbini B.40 from the same country. Only the prototype MVVS 2.5R/58 engines from Czechoslovakia achieved higher speeds.

This was to be the only appearance of the Alag Y-03 in International championship competition. After 1957, Hungarian honor was defended very capably by the new designs which emerged from the MOKI workshops. Nonetheless, the Alag Y-03 remained in production until 1960, during which time it served as an entry-level racing engine with which aspiring competitors could gain experience. There was also a plain bearing "Sport" version of the engine.

A full review and test of the production version of the Alag Y-03 appears elsewhere on this website.