The scope of the article is to investigate performance, emission, and combustion characteristics of Pongamia oil methyl ester as an alternative diesel fuel. The major problem of using neat pongamia oil as a fuel in a compression ignition engine arises due to its very high viscosity. Transesterification with alcohols reduces the viscosity of the oil. The performance and emission characteristics of Pongamia oil methyl ester and its blends with diesel oil are analyzed in a direct- injection diesel engine. A minor decrease in thermal efficiency with significant improvement in reduction of particulates, carbon monoxide, and unburned hydrocarbons is observed compared to diesel.