M.U.G.E.N is a free 2D fighting game engine designed by Elecbyte, written in C with the Allegro library. The engine was originally released in July 17, 1999. Beta versions of it were made to work on DOS, Linux and Windows platforms, distributed through their website or to donators via email. With the existence of the Linux version, support for DOS ceased.

The engine allows for anyone to create characters, background stages and other game objects through interpreted text files, graphics, and sound compilations. It supports various types of audio formats such as MP3, ADX, OGG and MIDI as background music during gameplay or at other points such as an introduction or the select screen. The engine allows for most of the same type of functionality found in most any commercial 2D fighting game, up to and including recreation of those games' characters and gameplay (though due to some limitations, exact replication is rarely possible even in a full game for more complex fighting games). While the engine is setup primarily for fighting game development, several other game types have been developed using it, including shooter and platformer style games.
(copied directly from the article at Wikipedia.org)