The exhaust emissions of diesel engine are recognized as a major cause influencing environment strongly. In this study, the possibility of biodiesel fuel and oxygenated fuel(dimethoxy methane; DMM) was investigated as an alternative fuel for a naturally aspirated direct injection diesel engine. The smoke emission of blending fuel(biodiesel fuel 90vol-%+DMM 10vol-%) was reduced approximately 70% at 2500rpm, full load, in comparison with the diesel fuel. But, power, torque and brake specific energy consumption showed no significant differences. But, NOx emission of biodiesel fuel and DMM blended fuel increased compared with commercial diesel fuel due to the oxygen component in the fuel. It was needed a NOx reduction counterplan that EGR method was used as a countermeasure for NOx reduction. It was found that simultaneous reduction of smoke and NOx emission was achieved with BDF(95 vol-%) and DMM(5 vol-%) blended fuel and cooled EGR method(15%).