The present study is mainly motivated to numerically simulate the autoignition and combustion process of a diesel spray in RCM and effects of design parameters on combustion and engine performance in the DI diesel engine using EGR. In case of the burning spray in RCM, special emphasis is given to the autoignition process coupled with the fluid mechanics and chemical reaction. Computations are carried out for a wide range of operating condition in terms of temperature, concentration of oxygen and carbon dioxide of the intake gas in the DI diesel engine. Numerical results indicate that the mixing process along the edges of spray jet has a crucial role for autoignition and combustion process. Temperature and concentration of O2 and CO2 of intake gas significantly influence the combustion characteristics and engine performance in the diesel/EGR environment.