When a Pokémon with Steam Engine is hit by a Fire- or Water-typemove, its Speed stat is increased by six stages. This Ability activates after any stat decreases caused by the move are applied.
Outside of battle
If a Pokémon with Steam Engine is in the party (even if fainted), the number of cycles it takes for all Pokémon Eggs in the party to hatch are halved. This effect does not stack with itself, Flame Body, or Magma Armor.