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Due to the shortage of petroleum products and its increasing cost, efforts are on to develop alternate fuels, especially diesel oil, for partial or full replacement. Also, internal combustion engines generate undesirable emissions during combustion process. The emissions exhausted in to the surroundings pollute the atmosphere and causes several problems. The emissions of concern are: unburnt hydrocarbons, oxides of carbon, and oxides of nitrogen (NO X). Advanced diesel fuel formulations offer significant emission reductions to new and older in-use engines every time the fuel tank is filled. The addition of water to diesel fuel lowers particulate emissions by serving as diluents to the key combustion intermediates that lead to particulate formation. The incorporation of water also reduces NO X emissions by lowering the peak combustion temperatures through high heat of vaporization. When using water blend diesel, the engine fuel system recognizes the liquid as diesel fuel because the water droplet is encapsulated within a diesel fuel. In this experiment, we have used single cylinder four-stroke engine and the water-blend diesel emulsion is used and the diesel emission test, emulsion emission test, and various gases has been analyzed; smoke meter test is also conducted for various rate of loads. The test results from the engine fuelled with water-blend diesel showed reduction in emissions as compared to that of engine fuelled with conventional diesel. The better emissions in the CI engine using water-blend diesel is due to the incorporation of water which reduces NO X emissions by lowering the peak combustion temperatures. Water-blend fuel enhances fuel atomization by micro-explosion. The addition of water to diesel fuel lowers particulate emissions by serving as diluents to the key combustion intermediates that lead to particulate formation [ABSTRACT FROM AUTHOR]