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The sterndrive, or stern drive, is also called inboard/outboard (I/O), and is a form of marine propulsion. The engine is located inboard just forward of the transom (stern) and delivers power via a shaft that goes through the transom to the drive unit (often referred to as the outdrive) located outside the hull, which resembles the bottom half of an outboard. This unit contains the gearing for the system and carries the propeller. The boat is steered by pivoting this unit, just like with an outboard motor, and no rudder is needed.

The engine itself is usually the same as those used in true inboard systems, historically the most popular of which being marinized versions of Chevrolet and Ford V-8 automotive engines. The most popular brand of sterndrive is MerCruiser, produced by Brunswick Corporation's Mercury Marine, which also manufactures outboard motors. In 1999 the company was sued by competitor Volvo Penta for monopolizing the stern drive business.

The history of stern drive power begins in 1948, when Charlie Strang mated an aluminum car racing engine to the lower unit of an outboard motor, in order to create a marine propulsion system more powerful than the outboard motors available at the time. The system would be patented ten years later by Jim Wynne. During the 1950s, both engineers worked at Mercury Marine under Carl Kiekhaefer, who was initially dismissive of and opposed to the idea of sterndrives, but would later capture 80% of the market. In 1958, Wynne left Kiekhaefer and in less than 90 days "invented" the stern drive. The first commercial introduction of sterndrives was by Volvo Penta at the 1959 New York Motor Boat Show. Kiekhaefer would introduce the first MerCruiser outdrive in 1961 at the Chicago Boat Show. By 1962, 16 manufacturers were producing sterndrives. There was also the Outboard Marine Company (O.M.C.); however, due to several patent wars, O.M.C. ceased production.

Advantages of the sterndrive system versus outboards include higher available horsepower per engine and a clean transom with no cutouts for the outboard installation and no protruding powerhead, which makes for easier ingress and egress for pleasure boat passengers and for easier fishing.

Advantages of the sterndrive system versus inboards include simpler engineering for boatbuilders, eliminating the need for them to design propshaft and rudder systems; also, a significant space savings with the engine mounted all the way aft, freeing up the boat's interior volume for occupancy space. This is of particular significance to consumers who are interested in "pocket cruisers," boats which have amenities like a head, a galley, and separate sleeping quarters in a boat less than 30 feet in length.

Performance with sterndrives is better than inboards, since the propeller is pushing the boat at an optimum angle for speed or acceleration depending on the trim angle of the drive. (Inboards have an inherent loss of propulsion force because of the angle of the prop shaft.)

The main disadvantages of sterndrives versus straight inboards is that they are more exposed. There are hoses, rubber bellows and oil lines in the water which can be damaged. There are also more components in the water which are exposed to corrosion.

Maintenance on I/Os is more complicated than outboards in several ways. For example, oil changes can require complicated pumping mechanisms, and engine repairs are often far more complicated than outboards because of incredibly tight spaces in the engine compartment. In some boats the entire engine must be removed to perform otherwise trivial repairs whereas, with an outboard, all one must do is pop off the cover.

With both inboards and stern drives there is a fire and explosion hazard from gasoline fuel vapors within the engine compartment. Typically these boats must run a blower for several minutes prior to starting the engine, and when idling or moving below cruise speed. The blower exchanges the air within the engine compartment with fresh outside air.

Because of their practical advantages and attractive cost, sterndrives have become extremely popular especially for use in pleasure boats, and there are many models of boats for which sterndrive power is the only available propulsion offered.

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