Source by: http://auto.howstuffworks.com/rotary-engine3.htm
Rotary Engine Assembly
A rotary engine is assembled in layers. The two-rotor engine we took apart has five main layers that are held together by a ring of long bolts. Coolant flows through passageways surrounding all of the pieces.
The two end layers contain the seals and bearings for the output shaft. They also seal in the two sections of housing that contain the rotors. The inside surfaces of these pieces are very smooth, which helps the seals on the rotor do their job. An intake port is located on each of these end pieces.
One of the two end pieces of a two-rotor Wankel engine
The next layer in from the outside is the oval-shaped rotor housing, which contains the exhaust ports. This is the part of the housing that contains the rotor.
The part of the rotor housing that holds the rotors
(Note the exhaust port location.)
The center piece contains two intake ports, one for each rotor. It also separates the two rotors, so its outside surfaces are very smooth.
The center piece contains another intake port for each rotor.
In the center of each rotor is a large internal gear that rides around a smaller gear that is fixed to the housing of the engine. This is what determines the orbit of the rotor. The rotor also rides on the large circular lobe on the output shaft.
Next, we'll see how the engine actually makes power.