In a vehicle with an automatic transmission, an internal combustion engine is provided with a variable compression ratio mechanism. A target compression ratio of the variable compression ratio mechanism is determined based on a demand load and an engine rotation speed with reference to a compression ratio map. A reverse-drive compression ratio map is selected when the automatic transmission is in a reverse drive position; a first compression ratio map is selected when an actual speed reduction ratio of the transmission is low; and a second compression ratio map is selected when the actual speed reduction ratio of the transmission is high. A variable control range of the compression ratio is narrower in the second compression ratio map than in the first compression ratio map and is narrower in the reverse-drive compression ratio map than in the first and second compression ratio maps.