In this paper, the combination effects of oxygen component in fuel and exhaust gas recirculation on the exhaust emissions have been investigated for a direct injection diesel engine. It is a kind of effective oxygenated fuel of diether group that the smoke emission of DGM(diethylene glycol dimethyl ether) blended fuel is reduced remarkably compared with commercial diesel fuel, that is, it can supply oxygen component sufficiently at higher loads and speeds in diesel engine. But, NOx emission of oxygenated fuel was increased compared with commercial diesel fuel. Also, the effects of exhaust gas recirculation(EGR) on the characteristics of NOx emission has been investigated. It was found that simultaneous reduction of smoke and NOx was achieved with oxygenated fuel(DGM 5vol-%) and cooled EGR method(10∼15%).