DME is a good alternative fuel to reduce the smoke remarkably when used in a diesel engine, while problems concerned with low lubricity and high compressibility exist. In the present study, single cylinder DI diesel engine was operated with neat DME and DME blended fuels which are DME-diesel blended fuel and DME-propane blended fuel. The results showed that the power of the neat DME and DME blended fuels was the same as that of pure diesel oil, and the specific energy consumption slightly increased. In addition, smoke emission was considerably reduced with the increase of DME content up to zero level, but NOx emission was slightly increased.