Various control methods for reducing nitrogen oxides (NOx) emissions of diesel engines have been developed to conform to strict emission regulations. One of the methods for controlling NOx emissions is to use emulsified fuel. This study investigates the effects of emulsified fuels on the diesel engine performance and main pollutant emission characteristics. Four different emulsified water-diesel fuel mixtures (0, 5, 10, 15, and 20% by mass) were used in the engine tests. The tests were conducted in a single-cylinder naturally aspirated direct injection (DI) four-stroke diesel engine under full load conditions. It has been observed that while brake power and torque slightly decrease, the brake efficiency considerably increases. NOx emissions have decreased with the increase in the mass rate of water in the mixtures. Optimum water rate in the mixture was found to be 20%. The maximum increase in brake efficiency was 17.5% at 1,200 rotations per minute (rpm) with E20 (emulsified fuel with 20% water content). Maximum improvements of 22, 27, and 40% were achieved in specific fuel consumption (SFC), NOx, and smoke emissions, respectively, at 2,400 rpm. (C) 2013 American Society of Civil Engineers.