The purpose of this study is to understand the operational characteristics of a diesel engine that uses BD20 reformed by ultrasonic energy irradiation. In particular we study the effects of tuning injection delay and EGR rate. BD containing about 10% oxygen has attracted attention due to soaring crude oil prices and environmental pollution. This oxygen decreases soot by promoting combustion, but it also increases NOx. To solve this problem, injection timing may be delayed or an EGR system may be applied. These adjustments normally lower engine power and increase exhaust emission but, in using fuel reformed by ultrasonic energy irradiation (which is changed physically and chemically to promote combustion), we may hope to circumvent this problem. To control the duration of the ultrasonic energy irradiation, the capacity of the chamber in an ultrasonic energy fuel supply system was tested at 550cc and 1100cc capacities. As for the results of the experiment, we could identify the optimum EGR rate by investigating the engine performance and the characteristics of exhaust emissions according to the injection timing and the EGR rate while ultrasonically irradiated BD20 was fed to a commercial diesel engine. With UBD20 (at an injection timing of BTDC $16^{circ}C$), the optimum EGR rate, giving satisfactory engine performance and exhaust emissions characteristics, was in the range of $15{sim}20%$.