Recently, the improvement of fuel economy and the reduction of exhaust smoke and NOx have been successfully achieved by supplying diesel engines with emulsified diesel oil with water particles. In the present paper, the difference between the combustion of injected emulsified fuel and that of diesel oil spray is clarified by means of taking high-speed and color photographs of the flames in the engine cylinder. As the results, the two kinds of fuels show different combustion behavior each other in the growth of initial flame and in the termination of combustion process in the cylinder. Then, suitable combustion chamber design for the use of emulsified fuel is discussed on the basis of experimental data for various distribution of spray in different kinds of piston cavities. Some methods of clearing troubles caused by emulsified fuel injection are also discussed on the basis of performance tests with a remodeling test engine.