Diesel engines have high thermal efficiency, and they have less CO & HC emissions than another engines. while NOx & Soot emissions are very much. compared with exhaust emission standards. However, the limit level is more and more strengthened yearly due to the importance of environmental protection. So, the optimal countermeasures for the reduction of NOx & Soot emissions below limit level are required. Therefore. the author has investigated the effects of emulsified fuel on the characteristics of exhaust emissions. using an four-cycle, four-cylinder and direct injection diesel engine because the using of emulsified fuel among various methods for reducing NOx & Soot emissions is simple in installation low in cost and high in efficiency. The results of investigation according to various operating conditions are as follows : 1) Specific fuel consumption increase maximum 19.8% at low load. but is not affected at full load. 2) In case of emulsion ratio 25%, NOx emission decrease 32% at 75% load. 30% at full load. 3) In case of emulsion ratio 25%, Soot emission decrease 84% at 75% load, 59% at full load.