An interference engine is one where the valves open to a position which is lower than the highest point of the piston's travel. In normal operation this makes no difference, but it means that if the belt or chain driving the valvegear breaks, the valves and pistons are likely to touch – resulting in potentially severe engine damage.
In an interference engine the volume of the combustion chamber is smaller, resulting in a higher compression ratio which improves efficiency – so most modern engines are interference designs.
