By means of the compatibility according to solving environmental pollution and energy problem due to the emissions of NOx and smoke from diesel engine this paper experimentally inspected the effect of using emulsified fuel, gas oil-water, for combustion characteristic, that is combustion pressure, pressure rise rate, heat generating rate, the period of ignition delay and specific fuel consumption, and CO, HC, NOx concentration and smoke density. When using emulsified fuel, as a water addition rate was increased, combustion pressure, pressure rise rate and heat generating rate was increased, the period of ignition delay was lengthening, the specific fuel consumption was some what increased in contrast to diesel fuel in low load, but deceased in high load region. And NOx concentration was decreased, CO concentration was increased in low load, but decreased in high load region, HC concentration was increased in contrast to diesel fuel in all region.