Four blended fuels were prepared by dissolving methane into diesel fuel under different pressures to form different dissolved methane concentrations. The dissolved methane concentrations were 0, 10.1, 16.1, and 23.8 milliliters of methane per milliliter of diesel fuel (mL/mL) at standard ambient temperature of 273.16 K and pressure of 101.325 kPa, respectively. The influences of the dissolved methane in diesel fuel on engine performance and emissions were examined in a single cylinder direct injection (DI) diesel engine. The study shows that there exists both a positive and a negative influence on the brake specific fuel consumption (BSFC) and the effective thermal efficiency depending on the methane concentration in diesel fuel. The blended fuel of diesel/methane with a methane concentration of 10.1 mL/mL gives the higher BSFC and the lower effective thermal efficiency than those of pure diesel fuel, but the blended fuels with methane concentrations of 16.1 and 23.8 mL/mL show the lower BSFC and the higher effective thermal efficiency as compared with those of pure diesel fuel. The ignition delay of the diesel fuel containing dissolved methane is larger than that of pure diesel fuel, and the value increased with the increase of methane concentration. However, the maximum heat release rate decreases with the increase of methane concentration. The diesel fuels containing dissolved methane produce less NO, emissions as compared with that of pure diesel fuel, while the influences of the dissolved methane on smoke depend on the methane concentration. For the blended fuels with methane concentrations of 16.1 and 23.8 mL/mL, the smoke emission presents a decrease. At an appropriate methane concentration, both NO, and smoke emissions decrease simultaneously. The hydrocarbon emission of diesel fuel containing dissolved methane is larger than that of pure diesel fuel, and the dissolved methane has little influence on carbon monoxide emission.