In this study, the potential of biodiesel fuel and oxygenated fuel (ethylene glycol mono-n-butyl ether; EGBE) was investigated as an effective method of decreasing the smoke emission. The smoke emission of blending fuel (EGBE 0~20 vol-%) was reduced in comparison with diesel fuel and it was reduced approximately 64% at 2000 rpm, full load in the 20% of blending rate. But torque and brake specific energy consumption (BSEC) didn't have large differences. Also, the effects of exhaust gas recirculation (EGR) on the characteristics of NOx emission has been investigated. Consequently, it was found that simultaneous reduction of smoke and NOx was achieved with biodiesel fuel and oxygenated fuel(10%) and cooled EGR rates (5~10%) in a DI diesel engine.