In a gas-fueled internal combustion engine, an ignition device (16, 6O, 62, 64, 66) is arranged in a moving direction of a stream of the gaseous fuel injected from an in-cylinder injection valve (40) in a combustion chamber. The ignition device can directly ignite the fuel stream and diffusive combustion of the gaseous fuel can be executed by sequentially injecting the gaseous fuel toward a flame created by the ignition. Further, premix combustion of the gaseous fuel can also be performed by igniting an air-fuel mixture after the gaseous fuel injected from the in-cylinder injection valve has been sufficiently mixed with the air. As an operation mode of the engine, a lean premix combustion operation is selected when the engine is operated in a prescribed operation region, and the operation mode is changed to a diffusive combustion operation when the engine is operated in a higher load operation region than the prescribed operation region.