The purpose of this paper is to investigate the effect of equivalence ratio on the combustion and emission characteristics of a compression ignition engine fueled with biodiesel. In this research, a single-cylinder direct injection engine with 373.3 cc of displacement volume was tested on DC dynamometer. In order to investigate the effect of biodiesel equivalence ratio on combustion characteristics, the experiments were conducted at various equivalence ratios and injection pressures of 40~120 MPa. For investigating engine performance, lambda meter was connected and equivalence ratios was varied from 0.6 to 1.0. In addition, the exhaust emissions such as oxides of nitrogen($NO_X$), hydrocarbon(HC) and carbon monoxide(CO) were measured by exhaust gas analyzer under the various air/fuel ratios. The experimental results show that maximum IMEP was measured at the 0.8 of equivalence ratio. Furthermore, $NO_X$ emission was rapidly decreased as the increase of equivalence ratio. However soot emission was significantly increased according to the increase of equivalence ratio.