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'Nikolaus August Otto' (June 10, 1832 Holzhausen, Nassau - January 26, 1891 Cologne) was the German inventor of the
internal-combustion engine, the first engine to efficiently burn fuel directly in a piston chamber. Although other internal combustion engines had been invented these were not based on four separate strokes. The concept of four strokes is likely to have been around at the time of Otto's invention but he was the first to make it practical¹.
In 1864, Otto co-founded an engine manufacturing business in Cologne. Along with his business partner Eugen Langen he established “N.A. Otto & Cie.”. This company exists today as “Deutz AG”, who boasts the fact that they are the world's oldest engine manufacturers, with over 140 years of experience.
The first major breakthrough at Otto's company was during its founding year, with the development of the "atmospheric gas power machine". This atmospheric engine was later awarded a Gold Medal at the World Exhibition in Paris as an economical drive engine for small businesses. Manufacturing of these engines began in 1868. In 1872 Gottlieb Daimler and Wilhelm Maybach joined his company for a while and together they produced the idea of the four-stroke cycle or, 'Otto cycle' engine, which was first described in 1876.
This engine was designed as a stationary engine and in the action of the engine, the stroke is an upward or downward movement of a piston in a cylinder. Used later in an adapted form as an automobile engine, four up-down strokes are involved: (1) downward ''intake'' stroke—coal-gas and air enter the piston chamber, (2) upward ''compression'' stroke—the piston compresses the mixture, (3) downward ''power'' stroke—ignites the fuel mixture by electric spark, and (4) upward ''exhaust'' stroke—releases exhaust gas from the piston chamber. Otto only sold his engine as a stationary motor.
In 1879, working independently in another part of Germany, Karl Benz was granted a patent for his internal combustion engine.
In 1882, the Philosophical Faculty of the University of Wurzburg awarded Otto with an honorary doctorate.
That same year Daimler and Maybach left Deutz-AG-Gasmotorenfabrik and in 1890 would establish Daimler Motoren Gesellschaft (Daimler Engines Company) or DMG. Its purpose was the construction of small, high speed engines based on the same technology.
In 1885 Karl Benz used his engine to propel a three-wheeled automobile that was granted a patent dated January 29, 1886. In the same year, Benz began production and sold automobiles.
The Otto Cycle engine patent was invalidated in 1886 when it was discovered that another inventor, Alphonse Beau de Rochas, had already described the four-stroke cycle principle in a privately published pamphlet.
In 1885 Daimler and Maybach designed and built a motorcycle with an engine of the Otto Cycle type that they patented. In 1886 they placed a stationary engine into a stagecoach as an experiment and, in 1889, designed and built their first automobile. DMG was founded in 1890. In 1892 they first sold an automobile to a customer.
According to recent historical studies, the Italian inventors Eugenio Barsanti and Felice Matteucci patented a first working efficient version of an internal combustion engine in 1854 in London (pt. Num. 1072). It is claimed that the Otto engine is in many parts at least inspired from this precedent invention [1], but, as yet there is no documentation of knowledge about the Italian engine by Otto.
In 1884, Otto once again revolutionized engine design. At this point in time internal combustion engines were stationary due to the fact that they could not run on liquid fuel. They were run with gas, and required a pilot light in order to operate. This changed with the introduction of a low-voltage magneto ignition. This electrical ignition system allows engines to use liquid fuel, making mobile use possible.
In 1900 Daimler died and in 1909 Maybach left Daimler Motoren Gesellschaft. In 1926, their successors at DMG merged with the Karl Benz company, forming Daimler-Benz.

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¹ http://www.ipaustralia.gov.au/pdfs/patentsmanual/WebHelp/National/Novelty/2.4.6.4_Mere_Paper_Anticipations.htm