Extensive experiments were conducted to investigate the emission of DI diesel engine by using DMC(dimethyl carbonate) as an oxygenated fuel additives. The results indicate that smoke reduces almost linearly with fuel oxygen contents. Reductions of HC and CO were attained noticeably, while a small increase in NOx was encountered concurrently. The effective reduction in smoke with DMC was maintained with the presence of CO2, which suggested a low NOx and smoke operation could be obtained in combination of using oxygenated fuel and EGR. Further experiment was conducted a thermal cracking set-up for mechanism studies.