This paper describes on experimental investigation into the heat dissipation of Diesel engine, placing emphasis on the variations of compression ratio and cooling water temperature. The engine used for this test was a vertical single-cylinder four-cycle type, having a direct injection. Engine performance and heat transfer rates was tested under the compression ratio 14.3 and 17.4. In this study, the results showed that output and transfer rates of engine decrease in accordance with the decrease of compression ratio. The effect of cooling water temperature and injection delay of fuel on the heat dissipation brings about the decrease of heat transfer rates from cylinder to cooling water.