In this study, the effects of oxygen component in fuel and exhaust gas recirculation(EGR) method on the exhaust emissions has been investigated for a D.I. diesel engine. It was tested to estimate change of exhaust emission characteristics for the commercial diesel fuel and oxygenate blended fuel which has five kinds of blending ratio. Dimethoxy methane(DMM) contains oxygen component 42.5% in itself, and it is a kind of effective oxygenated fuel for reduction of smoke emission. It was affirmed that smoke emission was decreased with increasing of DMM blending ratio. But, NOx emission was increased compared with commercial diesel fuel. It was needed a NOx reduction counterplan that EGR method was used as a countermeasure for NOx reduction. It was found that simultaneous reduction of smoke and NOx emission was achieved with DMM blended fuel and cooled EGR method(1015%).