EGR(Exhaust Gas Recirculation) systems are extensively used to reduce NOx emissions in light duty diesel engine but its application to heavy duty diesel engines is yet to be widely implemented. In this study, the simulation model for a EURO 3 engine was developed using WAVE and then its performance and emission levels were verified with experimental results. The possibility of operating a EURO 3 engine with LPL EGR system to satisfy the EURO 4 regulation was investigated. Each component of the engine was modeled using CATIA and WaveMesher. The engine test mode was ESC 13, and the injection timing and fuel quantity were changed to compensate for the reduction of engine power caused by applying EGR. As a result of the simulation, it was found that EURO 4 NOx regulation could be satisfied by applying an LPL EGR system to the current EURO 3 engine.