Compression ignition of homogeneous charges in IC engines indicates possibilities of achieving the high efficiency of DI diesel engines with low level of NOx and particulate emissions. The objectives of this study are to further understand the characteristics of the HCCI(Homogeneous charge compression ignition) combustion and to find ways of extending the rich HCCI operation limit in an engine-like environment. DME fuel is supplied either in the form of premixture with air or directly injected in the combustion chamber of a rapid compression and expansion machine under the conditions of various equivalence ratio and injection timing. The cylinder pressure is measured and the rate of heat release is computed from the measured pressure for the analysis of the combustion characteristics. The experimental data show that the RCEM can operate without knock on mixtures of higher equivalence ratio, when DME is directly injected in the combustion chamber than introduced as a fraction of a perfect or nearly perfect premixture. Very early fuel injection timings usually employed in HCCI operation are seen to have only insignificant effects in control of ignition timing.