The Source engine is a 3D game engine developed by Valve Corporation. Its unique features include a large degree of modularity and flexibility, an artist-driven, shader-based renderer, accurate lip sync and facial expression technology, and a powerful, efficient and completely network-enabled physics system.
one of the best engines that i have EVER seen... It seens that this is recent but actually its from 2002-2004... It has been developed along with half-life 2 (interesting fact is that hl2 started its development back in 1999, but by that time valve was still using the goldsrc engine)