We present a complete list of groups $G$ and fields $F$ for which: (i) the group of normalized units $V(FG)$ of the group algebra $FG$ is locally nilpotent; (ii) the set of nontrivial nilpotent elements of $FG$ is finite and nonempty, and $V(FG)$ is an Engel group.

If $k$ is a positive integer, a group $G$ is said to have the $FE_{k}$-property if for each element $g$ of $G$ there exists a normal subgroup of finite index $X(g)$ such that the subgroup $\langle g,x\rangle$ is nilpotent of class at most $k$ for all $x\in X(g)$. Thus, $FE_{1}$-groups are precisely those groups with finite conjugacy classes ($FC$-groups) and the aim of this paper is to extend properties of $FC$-groups to the case of groups with the $FE_{k}$-property for $k>1$. The class of $FE_{k}$-groups contains the relevant subclass $FE_{k}^{\ast }$, consisting of all groups $G$ for which to every element $g$ there corresponds a normal subgroup of finite index $Y(g)$ such that $\langle g,U\rangle$ is nilpotent of class at most $k$, whenever $U$ is a nilpotent subgroup of class at most $k$ of $Y(g)$.

Let $F$ be a field of characteristic $p\geq 0$ and $G$ any group. In this article, the Engel property of the group of units of the group algebra $FG$ is investigated. We show that if $G$ is locally finite, then ${\mathcal{U}}(FG)$ is an Engel group if and only if $G$ is locally nilpotent and $G^{\prime }$ is a $p$-group. Suppose that the set of nilpotent elements of $FG$ is finite. It is also shown that if $G$ is torsion, then ${\mathcal{U}}(FG)$ is an Engel group if and only if $G^{\prime }$ is a finite $p$-group and $FG$ is Lie Engel, if and only if ${\mathcal{U}}(FG)$ is locally nilpotent. If $G$ is nontorsion but $FG$ is semiprime, we show that the Engel property of ${\mathcal{U}}(FG)$ implies that the set of torsion elements of $G$ forms an abelian normal subgroup of $G$.