High temperature preheated and diluted air combustion has been developed as the technology to realize higher thermal efficiency. In this type of combustion, there are many interesting phenomena which cannot be observed in room temperature air combustion. The characteristics of the combustion, investigated using a 3500 kcal/h LPG fired test facility, are described. The flame is demonstrated to have a blue and green in color and has a large volume. As the preheated air temperature increased up to $1000;^{circ}C$, the NOx emission incrased exponentially over a few hundred ppm with 11% $O_2$ correction. But, it drastically reducedabout 20ppm when the air was diluted from 21% $O_2$ to 5% $O_2$.